Khadim India Limited reported a 39.6% year-on-year decline in net profit to ₹31.4 million for the financial year ended March 31, 2026, as revenue dropped 12.2% to ₹3,671 million. The decline in profitability was impacted by a contraction in gross margins and an exceptional item related to new Labour Codes. The company presented these audited standalone and consolidated financial results to investors on May 26, 2026, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Financial Performance

For the financial year ended March 31, 2026, the company reported a net profit of ₹31.4 million, compared to ₹51.95 million in the previous year. Revenue from operations for the year stood at ₹3,671 million, down from ₹4,180.33 million in the prior year. Total income for the period was ₹3,778.67 million. The company recorded an exceptional item of ₹18.20 million for the financial year related to the impact of new Labour Codes. Profit before tax from continuing operations for the year was ₹50.23 million.

For the quarter ended March 31, 2026, the net profit was ₹7.7 million, while revenue from operations was ₹835.6 million. Total income for the quarter stood at ₹861.66 million.

Operational Margins

Gross profit for FY26 stood at ₹1,796.4 million, with a gross margin of 48.9%, a decline of 550 basis points year-on-year. EBITDA before exceptional items for the year was ₹491.1 million, translating to an EBITDA margin of 13.4%. For the quarter ended March 31, 2026, EBITDA stood at ₹119.1 million, down 25.5% sequentially, with a margin of 14.3%. The gross margin for the quarter was 53.5%, compared to 57.1% in the corresponding period of the previous year.

Segment and Operational Details

The company is primarily engaged in the footwear and accessories business segment. The financial results reflect the impact of a demerger effective from May 1, 2025, wherein the distribution business was transferred to KSR Footwear Limited. Consequently, the results of the distribution business up to the appointed date have been disclosed as discontinued operations. The company operates 851 'Khadim's' branded retail stores as of March 26, 2026.

Consolidated Results

On a consolidated basis, the net profit for the financial year was ₹30.99 million. Revenue from operations remained consistent with the standalone figures at ₹3,670.95 million. Total comprehensive income for the year was ₹36.34 million.

Key Financial Metrics

Source: https://lodr-files.dhan.co/lodr-inputs/Company/INE834I01025/da57e1bb00c14317.pdf

Khadim India Limited has received a significant legal victory after the Hon'ble High Court of Punjab and Haryana, Chandigarh, confirmed the Arbitral Award dated June 27, 2022, which was passed in favour of the Company. The order, dated May 05, 2026, was received by the Company on May 12, 2026, and was disclosed to the stock exchanges on May 13, 2026, under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Background of the Dispute

The matter stems from a dispute between Khadim India and Samagra Shiksha Abhiyan Authority (SSAA), Punjab, through Director General School Education-cum-State Project Director (DG-School) ("the Tenderer"), relating to a tender for supply of school shoes and uniform. The Tenderer, vide its order dated August 28, 2020, withheld receivables of ₹ 32,00,00,000/- (Rupees Thirty Two Crores) (approx.) and forfeited Performance Bank Guarantees of ₹ 1,50,00,000/- (Rupees One Crore Fifty Lakhs) and ₹ 35,00,000/- (Rupees Thirty Five Lakhs). Aggrieved by these actions, Khadim India pursued legal recourse and entered into arbitration before an Arbitral Panel.

Arbitral Award and Subsequent Legal Proceedings

The Arbitral Panel, on June 27, 2022, passed an award in favour of Khadim India. The key details of the award and subsequent proceedings are summarised below:

Timeline of Regulatory Disclosures

Khadim India has been consistently disclosing the progress of this litigation to the stock exchanges in accordance with SEBI regulations. The Company had made prior disclosures on:

• August 11, 2023: Initial disclosure regarding the pendency of litigation and details of the Arbitral Award dated June 27, 2022.
• October 31, 2023: Disclosure informing that the Learned District Court at Mohali had set aside the Arbitral Award vide its order dated August 16, 2023, and that the Company had filed an appeal before the Hon'ble High Court of Punjab and Haryana, Chandigarh.
• May 13, 2026: Disclosure confirming that the Hon'ble High Court of Punjab and Haryana, Chandigarh, vide its order dated May 05, 2026, confirmed the Arbitral Award in favour of the Company.

High Court Order Restores Award in Company's Favour

The Hon'ble High Court of Punjab and Haryana, Chandigarh, vide its order dated May 05, 2026, confirmed the Arbitral Award dated June 27, 2022, which was originally passed in favour of Khadim India. The High Court simultaneously rejected the order dated August 16, 2023, passed by the Learned District Court at Mohali, which had set aside the Arbitral Award in favour of the Tenderer. The disclosure was made by Abhijit Dan, Group Company Secretary & Head – Legal, Khadim India Limited, on May 13, 2026.