Kusumgar Limited (formerly Kusumgar Private Limited) has initiated a postal ballot process to seek shareholder approval for the ratification of its 'Kusumgar ESOP 2024' employee stock option scheme. The move is mandated by Regulation 12(1) of the SEBI (Share Based Employee Benefit and Sweat Equity) Regulations, 2021, which requires listed companies to obtain fresh member approval for any pre-listing ESOP schemes to ensure conformity with current regulatory standards.

The company’s Board of Directors approved the proposal in its meeting held on August 11, 2026. Shareholders are being asked to pass two special resolutions: one to ratify the ESOP scheme and another to approve the grant of stock options to employees of the holding company, subsidiaries, and associate companies in India or abroad.

Scheme Details and Pool Status

The 'Kusumgar ESOP 2024' scheme was originally approved by members prior to the company’s IPO and subsequently amended in June 2025 to increase the total option pool. The scheme aims to attract and retain talent by allowing eligible employees and directors to share in the value created by the organization.

As per the explanatory statement, the total number of options that may be granted under the scheme is capped at 25,37,250. Each option, upon exercise, converts into one fully paid-up equity share with a face value of Re. 1/-. The Nomination and Remuneration Committee of the Board will administer the scheme.

Eligibility and Vesting

Eligibility for the scheme extends to permanent employees and directors of Kusumgar Limited and its group companies, excluding promoters, promoter group members, independent directors, and directors holding more than 10% of the outstanding equity shares. The minimum vesting period for stock options is one year, though specific schedules may vary based on individual grant letters.

Options can be exercised within a maximum period of 10 years from the date of vesting. In cases of resignation or termination without misconduct, vested options may be exercised before the last working day, while unvested options stand cancelled. For deaths or permanent disability, unvested options vest immediately and can be exercised by nominees.

Voting Process

The remote e-voting period begins on Wednesday, August 19, 2026, at 9:00 am and ends on Thursday, September 17, 2026, at 5:00 pm. Only members whose names appear in the register as on the cut-off date of August 14, 2026, are entitled to vote. The National Securities Depository Limited (NSDL) has been engaged to facilitate the e-voting process. Results are expected to be declared on or before September 21, 2026.

What the Numbers Show

With 21,87,782 options already granted out of the approved pool of 25,37,250, approximately 86% of the total authorized ESOP pool has been allocated. This high utilization rate suggests the company has aggressively employed equity incentives to align employee interests with shareholder value creation since the scheme's inception, leaving only 3,49,468 options available for future grants unless the pool is further expanded.

Kusumgar Limited has released the transcript of its earnings conference call held on August 14, 2026, discussing its unaudited standalone and consolidated financial results for the quarter ended June 30, 2026. This disclosure was made in compliance with Regulation 30 and Regulation 46 read with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The company reported consolidated revenue from operations of ₹247.2 crore for Q1FY27, a 102% increase from ₹122.5 crore in the same quarter last year. This growth was primarily driven by the execution of ready parachute contracts. Sequentially, revenue declined approximately 21% from ₹312.8 crore in Q4FY26. Management attributed the sequential dip to a normalized cadence after an anomalous Q4FY26, which included a concentrated push of export segments following the resolution of US tariff uncertainties.

Financial Performance

Profitability metrics showed significant expansion year-on-year. Consolidated EBITDA stood at ₹75.9 crore, representing a margin of 31%, up from 22% in Q1FY26. This 900 basis point expansion was driven by a richer product mix including higher-margin parachute contracts. Sequentially, the margin moderated from 41% in Q4FY26 due to lower operating leverage as revenue normalized.

Profit after tax (PAT) rose sharply to ₹42.6 crore (17% margin) compared to ₹6.6 crore (5% margin) in Q1FY26.

What the Numbers Show

The divergence between the strong year-on-year growth and the sequential decline highlights the volatility inherent in Kusumgar’s order execution cycle. While Q4FY26 saw a surge due to expedited exports and parachute shipments, Q1FY27 reflects a more normalized baseline. The expansion in EBITDA margins despite lower sequential revenue suggests that the current product mix remains structurally more profitable than the previous year’s period, even without the volume spike seen in the preceding quarter.

Business Outlook and Guidance

Ankur Kothari, Executive Director and CEO, stated that management prefers not to provide detailed forward-looking guidance on revenue or profitability. He cited three structural uncertainties: the long approval cycles for products (90% of business linked to approvals), the unpredictability of government tenders from Indian and foreign militaries, and global trade volatility such as US tariffs.

Kothari noted that while the company expects steady growth over the next few years, the timing of revenue recognition remains uncertain. He added that geopolitical tensions, particularly in the Middle East, could lead to increased defense spending, serving as a long-term tailwind.

Operational Highlights

During the call, management addressed several operational aspects:

• Capacity Utilization: Current utilization stands between 55% and 60%. A large capex project came fully online last year, but full utilization depends on progressive product approvals.
• Capex Plans: No large capex is planned for FY27-FY28 beyond maintenance capex (estimated at 5-10% of gross block). The company is exploring new areas but these are not yet materialized.
• Segments: The company operates across aerospace/defense fabrics, aerospace/defense solutions, industrial/automotive fabrics, and outdoor/lifestyle fabrics. Segmental reporting is not applicable as the company is treated as a single segment.
• Order Book: Management declined to disclose the executable order book, citing difficulties in parsing formal POs, LOIs, and projections.
• Receivables: Debtor days have normalized after being artificially high in Q4FY26 due to large quarter-end shipments. Management confirmed operating cash flow is expected to remain positive.