Kusumgar Limited

1. Overview

Kusumgar Limited (formerly Kusumgar Private Limited) is a manufacturer of woven, coated and laminated synthetic ("engineered") fabrics, operating in the specialty/technical textiles manufacturing sector. Originally incorporated in 1956 and tracing its manufacturing roots to 1970, the Company has evolved from a general textile manufacturer into a niche, high-technology fabrics business built around polyamide and polyester filament yarns and polyurethane chemistry.

Geographically, the Company's manufacturing footprint is concentrated in Gujarat, India — six manufacturing facilities, supplemented by one fabrication unit in Uttar Pradesh. Its integrated operations span preparatory, weaving, dyeing, printing, finishing, coating, lamination and fabrication. Commercially, it sells to both government-owned defence entities and private companies, with 39.99% of Fiscal 2026 revenue from contracts with customers derived from exports to Asia, Europe and the Americas.

Competitively, the Company positions itself as one of the major players in military parachute fabrics outside the United States and China, and holds long-standing relationships — including a multi-decade relationship with an Indian government defence customer — as well as a global brand relationship with Decathlon in the outdoor/lifestyle segment. It identifies high entry barriers (technical know-how, long product-approval cycles, customization, life-preserving product criticality, brand partnerships, and scale) as core to its competitive moat.

2. Business Model and Revenue Streams

The Company generates revenue from four primary market segments plus a residual "Other Sales" category (yarn/chemical sales and job work). Segment-wise revenue for the last three Fiscals is set out below:

Notable shift: Aerospace and Defence Solutions grew from a near-nil 0.19% of revenue in FY2024 to 22.97% in FY2026, driven substantially by a single large Combat Free Fall (CFF) parachute systems order recognized in FY2025 (₹222.59 crore). Management flags this order as non-recurring in nature, since the Company does not typically hold long-term supply agreements.

Customer model: The Company does not generally enter into long-term agreements with customers, leading to revenue volatility by customer. In Fiscal 2026, its top 10 customers contributed 59.52% of revenue from contracts with customers (up sharply from a low base historically), and its top 6 named/anonymized customers contributed 49.35%. Decathlon Sports India (via its fabricators) is the Company's only customer with public consent to be named; other large customers remain undisclosed at their request.

Channel structure by customer type:

Geographic mix:

Vendor/supplier dependency: The Company does not enter into long-term contracts with material suppliers, purchasing on a purchase-order basis. Its top 10 suppliers accounted for 51.42% of cost of materials consumed in FY2026. It imports key inputs (synthetic yarn, polyurethane resin, fabric lamination film), with 38.91% of FY2026 material cost being imported, of which Taiwan alone accounted for 19.37%.

3. Products and Service Portfolio

The Company's four reporting segments map to distinct product lines:

Aerospace and Defence Fabrics: High-performance aeronautical fabrics ranging from 25 GSM to 500 GSM, made from Polyamide 66 High Tenacity yarns, used for parachutes, paragliders, hot air balloons, sails, kites and aerostats. Within parachute fabrics, the Company supplies cargo drop, tactical assault, high-altitude penetration, drogue, recovery, and space-module recovery (entry-descent-landing) parachute types, and is recognized (per the Lattice industry report) as a major India-based manufacturer of high-performance parachute fabrics.

Aerospace and Defence Solutions: End-user finished systems across three lines — aerial systems (parachute systems), stealth systems (camouflage nets) and rapid deployment systems (decoys, shelters) — plus maintenance and repair service agreements.

Industrial and Automotive Fabrics: Four business lines — tapes (third/fourth-tier automotive OEM supplier; also shoe, leather, electrical insulation and emerging medical-tape applications), custom fabric solutions, mechanical rubber goods (MRG) (hoses, heddle belts, spindle tapes), and inflatable fabrics (base fabrics for the aerospace-linked inflatables market). 66.21% of this segment's FY2026 revenue was tied, directly or indirectly, to exports.

Outdoor and Lifestyle Fabrics: Synthetic performance wear ("activewear"/"athleisure"), winter wear, rainwear, fashion jackets, and personal gear (backpacks, luggage, sleeping bags, tents). The Company is an approved supplier to global brands including Decathlon, benefiting from the "China+1" supply-chain diversification trend.

Manufacturing capacity and utilisation (Processing, Dyeing, Finishing, Printing and Coating factories, aggregate):

Weaving facilities (aggregate) recorded installed capacity of 34.17 million metres in FY2026 (up from 19.72 million metres in FY2025, reflecting the Kosamba Weaving 3 facility commencing operations in April 2025), with utilisation of 62.51% in FY2026 versus 84.43% in FY2025. Overall utilisation trends reflect substantial new capacity additions (Karanj processing and coating facilities, new weaving line) outpacing near-term production ramp-up, rather than demand softness — evidenced by the sharp FY2024 utilisation figures (94%+) prior to expansion.

The Company operates six manufacturing facilities, all in Gujarat, plus one fabrication unit in Uttar Pradesh, with vertically integrated capabilities spanning yarn texturizing/twisting, warping/sizing/beaming, water-jet/rapier/air-jet/narrow-woven-needle looms, scouring/heat-setting, dyeing/finishing, printing, coating, lamination, and cut-and-sew/laser-cutting fabrication.

4. Key Business Strengths

• High-barrier niche positioning: The Company operates in a market with six identified structural entry barriers — technical know-how, multi-year (2–10 year) product approval cycles, customization requirements, life-preserving product criticality (parachutes, ballistic protection, extreme-cold gear), exclusive brand/technology partnerships, and scale/certification requirements for government tenders.
• Vertically integrated, technically differentiated manufacturing: Full control across fine-denier weaving, Nylon 6/66 processing, complex fabric engineering, coating/lamination (PU, TPU, silicone, PTFE), and end-to-end value-chain integration, enabling quality consistency and cost optimization without dependency on external processors.
• Deep, difficult-to-replicate partnership network: A web of 13+ technical, sales, raw-material and co-development partnerships spanning the US, Taiwan, Italy, Switzerland and Japan — several with exclusivity in India — that provide proprietary technology access and lock in long-term demand.
• Trusted long-standing government and marquee-brand relationships: Multi-year track record as a primary parachute-fabric supplier to an Indian government customer and an approved fabric supplier to Decathlon, reinforced by high customer switching costs once design specifications are qualified.
• Experienced promoter-led leadership: Promoters and senior management collectively bring 20–25+ years of sector experience each, supported by a professional management team including a CEO with Boston Consulting Group and Arvind Limited experience.

5. Future Growth Strategy

• "Build, retain, extend" playbook in Aerospace & Defence: Continue winning custom-development mandates, deepen existing relationships, and extend proven product designs to a broader customer base — targeting a domestic aerospace/defence fabric market projected to grow at a 20.0% CAGR (FY2025–FY2030).
• Expansion into proprietary end-systems: Move beyond fabric supply into the Company's own branded aerospace and defence systems — parachutes, camouflage nets, decoys and shelters — both domestically and via international distribution partnerships.
• Capture "China+1" outdoor/lifestyle share: Deepen relationships with global outdoor and activewear brands shifting sourcing away from China and Taiwan, leveraging Decathlon-anchored credibility and limited domestic competition in engineered fabrics.
• Steady, margin-disciplined growth in Industrial & Automotive: Prioritize low cost-sensitivity customers and export-linked demand, while broadening tapes into medical applications and scaling the inflatables business line to challenge an incumbent-dominated global market.
• Continued high-margin, high-barrier product focus: Sustain industry-leading EBITDA margins by concentrating capital and R&D on defence-grade and technically complex products rather than commodity textiles.
• Capability and efficiency investment: Ongoing investment in people, R&D and overall equipment effectiveness (OEE), selective outsourcing of low-differentiation processes (weaving, knitting, finishing, fabrication), and continued use of central/state government textile incentive schemes.