Khadim India Limited reported a significant decline in profitability for the first quarter of FY26, with standalone net profit falling to ₹5.24 million compared to ₹8.62 million in the same period last year. The Kolkata-based footwear manufacturer saw its consolidated net profit drop to ₹5.22 million from ₹8.51 million year-on-year. While revenue from operations declined to ₹778.42 million from ₹957.04 million, the company benefited from a sharp rise in other income, which more than doubled to ₹58.26 million from ₹25.21 million. These results were approved by the Board of Directors on August 07, 2026, following a review by the Audit Committee.

The financial performance was shaped by shifting cost structures and inventory management. Cost of materials consumed rose slightly to ₹11.11 million from ₹8.11 million, while purchases of stock-in-trade fell significantly to ₹519.21 million from ₹679.14 million. A key driver for the reduced expense base was a favorable change in inventories, which contributed a negative ₹152.44 million to expenses compared to negative ₹186.56 million in the prior year. Employee benefits expense also decreased to ₹113.60 million from ₹122.93 million. Finance costs remained relatively stable at ₹63.63 million, down marginally from ₹66.00 million.

Key Financial Metrics

What the Numbers Show

The divergence between revenue decline and expense reduction highlights a shift in operational dynamics. While top-line revenue contracted by nearly 19%, total expenses fell by approximately 14%, largely due to lower stock purchases and reduced employee benefits. However, this cost containment was insufficient to offset the revenue drop, leading to a 52% plunge in profit before tax. The surge in other income provided a crucial buffer, preventing a deeper hit to the bottom line. Without this non-operational boost, the net profit contraction would have been even more severe, underscoring a reliance on non-core earnings to sustain profitability during a period of weaker sales.

Corporate Developments

In addition to the financial results, Khadim India Limited announced that shareholders approved the issuance of 1,022,727 Fully Convertible Equity Share Warrants at an exercise price of ₹110 per share via an Extra-ordinary General Meeting held on August 01, 2026. The warrants, aggregating up to ₹112.50 million, are intended for promoter and non-promoter categories. Allotment is pending in-principal approval from stock exchanges and will occur within 15 days of receipt, upon payment of 25% of the issue price. The warrants will convert into equity shares within 18 months.

The unaudited standalone and consolidated financial results were reviewed by M/s. Ray & Ray, the statutory auditors, under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company continues to monitor the implementation of new Labour Codes, having previously recognized an exceptional impact of ₹18.20 million in FY26 related to gratuity and leave encashment benefits.

Khadim India Limited has confirmed to stock exchanges that it will re-compute the issue price of its preferential issue of Fully Convertible Equity Share Warrants (FCEWs) in accordance with the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018. This disclosure follows the overwhelming approval by shareholders at the Extraordinary General Meeting (EGM) held on August 1, 2026, which authorized the issuance of 10,22,727 warrants worth ₹11.25 crore. The company explicitly stated that if any differential amount payable due to this re-computation is not paid within the timeframe stipulated by the ICDR Regulations, the allotted warrants will remain locked-in until the payment is made.

The filing, submitted on August 5, 2026, under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, serves as a formal confirmation of the terms agreed upon during the capital raise process. Group Company Secretary & Head – Legal Abhijit Dan signed the intimation letter sent to both the National Stock Exchange of India Limited (NSE) and BSE Limited. This procedural step ensures transparency regarding the financial obligations attached to the newly approved securities, particularly concerning potential adjustments to the initial issue price.

Voting Results and Shareholder Mandate

The special resolutions for the FCEW issue and the appointment of Sekhar Bhattacharjee as an Independent Director passed with support exceeding 99.99%. The consolidated Scrutinizer’s Report, issued by Atul Kumar Labh of A. K. Labh & Co., validated the voting process. Promoter and Promoter Group shareholders, holding 11,006,907 shares, voted unanimously in favor. Dissenting votes were minimal, originating primarily from public non-institutional investors.

One vote totaling 10,000 shares from the Public Institutions category was declared invalid for each resolution. The remote e-voting period ran from July 29, 2026, to July 31, 2026, with a cut-off date of July 25, 2026.

Issue Details and Utilization

The approved FCEW issue involves warrants priced at ₹110 each, convertible into one fully paid-up equity share with a face value of ₹10. The aggregate amount raised is capped at ₹11,24,99,970. An independent valuation report by Mr. Vikram Kumar Singh confirmed that the offer price exceeds the price determined under the ICDR Regulations, with July 2, 2026, as the relevant date for determining the issue price. Proceeds will be allocated as follows:

• ₹1.75 crore for working capital requirements
• ₹3.5 crore for long-term financial needs related to business expansion
• ₹6 crore for the purchase of land or property for warehouse construction

Promoter Siddhartha Roy Burman intends to subscribe to 2,27,273 warrants. Other non-promoter allottees include Ms. Aarya Ketan Kotecha, Mr. Aniket Vijay Latkar, and Gold Circle Venture Partners LLP. Post-issue, promoter holding is expected to remain stable at approximately 57.91%, assuming full conversion of warrants within 18 months from allotment.