Kusumgar Limited

Consumer Cyclical — Textile Manufacturing · NSE

₹579.95+₹0.25 (+0.04%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

The 60-second version of Kusumgar Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Kusumgar Limited manufactures, markets, and supplies a range of technical textile fabrics.

IndustryTextile Manufacturing

SectorConsumer Cyclical

Employees1,051

Annual revenue₹675 Cr

How does it make money?

Turns over ₹675 Cr a year. Of every ₹100 of sales, about ₹15 reaches shareholders as profit, with ₹30 left at the operating level before interest, tax and depreciation. Each of its 1,051 employees supports ₹64.2 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹64.2 lakh

Who are its competitors?

The closest listed comparisons in its industry are MARUTI SUZUKI INDIA LTD., TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 24.5%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 19.5% against a peer median of 25.9% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

Peer median ROE25.9%

What is the outlook?

1 analysts covering the stock expect revenue to grow about 16.2% and earnings to grow about 10.1% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+16.2%

Est. earnings growth+10.1%

Analysts1

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +128% while net margin moved +15% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+128%

Margin effect+15%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✗ P/E of 45.4x is demanding — it needs sustained high growth to justify
✗ P/B of 11.74x is a steep premium to book

Quality vs. Valuation

Company Quality

74/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

52/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

45.4x

Sector Median

69.2x

median of 4 sector peers

🟢Against its sector it trades 34% below the peer median of 69.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

69.2x median of 4 peers · -34%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

30.9x

PEG

1.19

What's Good / What's Bad

🟢 What's Going Well3

Margins are improving
EBITDA margin is up from 23.3% to 30.5% over 3 years.
High return on capital employed
ROCE of 24.5% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 66.9% to 19.5% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 63.5% to 24.5% — often a sign of competition or overexpansion.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Debt has risen sharplyFinancial
Total debt is up 414% over 3 years, from ₹56 Cr to ₹288 Cr.
🔴Receivables growing faster than salesFinancial
Receivables up 322% against revenue up 128% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹42 Cr in the latest year.
🟡Inventory building faster than salesFinancial
Inventory up 188% against revenue up 128% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 24.5% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 23.3% to 30.5%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 34% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 322% against revenue up 128%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Returns on shareholder capital are falling
ROE has dropped from 66.9% to 19.5%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 24% a year✓ 31.7% CAGR
Latest reported year was 101.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 28%✓ 30.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹42 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 1.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 21%✓ 24.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

10 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 2 neutral · 3 weak

Market Cap

₹6,089 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

45.4x

Expensive

Expensive — verify against sector peers

P/B Ratio

11.74x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹12.78

Profitable

Profitable on a per-share basis

ROE

19.5%

Strong

Strong capital efficiency

ROCE

24.5%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.57x

Low

Conservative leverage

Revenue Growth (YoY)

101.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

539.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹42 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

33.1x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

25.4%

Good

Healthy core-business profitability

Net Margin

16.4%

Good

Strong bottom-line conversion

Current Ratio

2.09

Comfortable

Healthy short-term liquidity

52W Range Position

37%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

604.4 / 593.1

Bullish alignment (short > long)

RSI (14)

35.9

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹295 Cr	₹456 Cr	₹770 Cr	₹675 Cr	+31.7%
EBITDA	₹69 Cr	₹137 Cr	₹199 Cr	₹206 Cr	+44.2%
EBITDA Margin	23.3%	30.0%	25.8%	30.5%	—
PAT (Net Profit)	₹37 Cr	₹84 Cr	₹112 Cr	₹98 Cr	+38.2%
EPS	₹3.54	₹8.04	₹10.67	—	—
ROE	66.9%	60.1%	43.4%	19.5%	—
ROCE	63.5%	54.8%	42.5%	24.5%	—
Total Debt	₹56 Cr	₹119 Cr	₹302 Cr	₹288 Cr	+72.5%
Free Cash Flow	-₹31 Cr	₹123 Cr	-₹262 Cr	-₹42 Cr	—

🟢 Revenue has grown at 31.7% a year over 3 years.

🟢 EBITDA has grown at 44.2% a year over 3 years.

🟢 EBITDA Margin has risen from 23.3% to 30.5% over 3 years (+7.2 pts).

🟢 PAT (Net Profit) has grown at 38.2% a year over 3 years.

🔴 ROE has fallen from 66.9% to 19.5% over 3 years (-47.4 pts).

🔴 ROCE has fallen from 63.5% to 24.5% over 3 years (-39.0 pts).

🔴 Total Debt has grown at 72.5% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹905 Cr

Total Liabilities

₹402 Cr

Cash & Equivalents

₹26 Cr

Operating Cash Flow

₹28 Cr

Capex

-₹70 Cr

Shareholding (proxy)

Institutional Holding

12.5%

Insider Holding

77.6%

Analyst Consensus

Recommendations

1 Buy · 0 Hold · 0 Sell

Target Price (Mean)

₹750

+29.3% vs CMP

Target Range

₹750 – ₹750

Peer Comparison

Company	P/E	ROE
MARUTI SUZUKI INDIA LTD.	25.2x	13.4%
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%

Recent News

1 mixed5 general

Kusumgar Share Price news: valuation and peers in focus

Univest, 24 Aug

KUSUMGAR LIMITED Share Price

Upstox, 15 Jul

Compare with

Equitymaster, 17 Oct

Kusumgar Ltd | Stock Share Price Live

MarketSmith India, 21 Sept

Kusumgar shares list at up to 37% premium over IPO price on BSE, NSE

The Economic Times, 15 Jul

Kusumgar Shares Soar 44% on Market Debut

Rediff MoneyWiz, 15 JulPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth

MiddlingFinancial Health · Profitability

WeakValuation · Risk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 2 high-severity red flags sit above this conclusion and should be read first.

1 of 5 tripwires tripped — Free cash flow remains positive · see Key things to watch ↑