💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 14.4% YoY to INR 5,722.20 Lakhs. Standalone operations (Facility Management) grew 10.5% to INR 5,244.96 Lakhs. Subsidiary KHFM Infra Projects contributed INR 449.93 Lakhs, while KHFM & DP Jain Company contributed INR 67.32 Lakhs.

Geographic Revenue Split

Not disclosed in available documents, though the company is headquartered in Mumbai, Maharashtra.

Profitability Margins

Consolidated PBT margin stood at 2.74% for H1 FY26. Standalone Net Profit margin improved to 4.02% (INR 210.87 Lakhs) compared to 3.28% in the previous half-year, driven by tax credits.

EBITDA Margin

Operating Profit before working capital changes was INR 403.34 Lakhs (7.05% margin), a decrease from the previous year's full-year run rate, primarily due to a 51.3% surge in employee benefit expenses.

Capital Expenditure

Not explicitly disclosed for the current period; however, the company recorded a 'Sale of Property, Plant & Equipment' in previous periods with minimal current additions.

Credit Rating & Borrowing

Total borrowings as of September 30, 2025, reached INR 3,706.70 Lakhs (INR 36.30 Cr current, INR 0.77 Cr non-current). Finance costs for H1 FY26 were INR 260.46 Lakhs, representing an annualized interest impact of approximately 14-15% on outstanding debt.

⚙️ Operational Drivers

Raw Materials

As a service-oriented firm, 'Employee Benefits' is the primary input, representing 50.6% of total revenue (INR 2,895.62 Lakhs). Other operational expenses (consumables/contract costs) represent 42.3% of revenue (INR 2,421.19 Lakhs).

Import Sources

Not disclosed in available documents; services are primarily domestic-based.

Capacity Expansion

Not disclosed in available documents; growth is driven by manpower deployment rather than fixed manufacturing capacity.

Raw Material Costs

Employee costs increased 51.3% YoY to INR 2,895.62 Lakhs, significantly outpacing revenue growth of 14.4%, indicating higher labor procurement costs or aggressive hiring for new sites.

Manufacturing Efficiency

Not applicable for service sector; however, standalone employee cost efficiency declined as costs rose faster than revenue.

📈 Strategic Growth

Expected Growth Rate

14.40%

Growth Strategy

The company is achieving growth through its subsidiary KHFM Infra Projects (contributing 7.8% of consolidated revenue) and expanding its core facility management contracts. The strategy involves leveraging the parent company's brand to secure higher-value infrastructure and hospitality management contracts.

Products & Services

Hospitality management, facility management services (cleaning, security, maintenance), and infrastructure project management.

Brand Portfolio

KHFM

New Products/Services

Infrastructure project management through the KHFM Infra Projects subsidiary, which generated a profit of INR 27.78 Lakhs in H1 FY26.

Market Expansion

Expansion into infrastructure-related services to complement existing facility management portfolios.

Strategic Alliances

Partnership with D P Jain Company through the subsidiary KHFM & DP Jain Company.

🌍 External Factors

Industry Trends

The facility management industry is shifting toward integrated services and infrastructure maintenance. KHFM is positioning itself by incorporating infra-project subsidiaries to capture higher-margin technical services.

Competitive Landscape

Operates in a highly fragmented market with competition from both large integrated players and small local vendors.

Competitive Moat

The company relies on its long-standing brand in the hospitality and facility sector and its ability to manage large-scale manpower. However, the moat is narrow due to low entry barriers and high competition in the unorganized sector.

Macro Economic Sensitivity

Highly sensitive to labor laws and minimum wage inflation in India, as personnel costs are the largest expense component.

Consumer Behavior

Increased corporate and government outsourcing of non-core facility and maintenance tasks is driving demand.

Geopolitical Risks

Low, as the business is focused on domestic Indian facility and infrastructure management.

⚖️ Regulatory & Governance

Industry Regulations

Subject to Contract Labour (Regulation and Abolition) Act and various state-specific minimum wage and shop/establishment acts.

Taxation Policy Impact

The company benefited from a tax credit/reversal of INR 12.92 Lakhs in H1 FY26, which supported the bottom line despite operational cost pressures.

Legal Contingencies

The company reported 'Allowance for Doubtful Debts' of INR 0.14 Lakhs, indicating minimal immediate legal disputes over payments, though trade receivables remain high at INR 43.21 Cr.

⚠️ Risk Analysis

Key Uncertainties

Working capital management is a critical risk; the company saw a net cash outflow from operations of INR 187.87 Lakhs due to a massive increase in trade receivables.

Geographic Concentration Risk

Primarily concentrated in the Mumbai/Maharashtra region based on corporate address and subsidiary locations.

Third Party Dependencies

High dependency on the performance of the KHFM Infra Projects subsidiary for consolidated profitability, as the other subsidiary (KHFM & DP Jain) is currently loss-making (INR 5.91 Lakhs loss).

Technology Obsolescence Risk

Low risk for manual facility management, but increasing risk if competitors adopt automated cleaning and security technologies.

Credit & Counterparty Risk

Significant exposure to trade receivables, which increased by INR 432.09 Lakhs during the half-year, potentially impacting liquidity.