1. At a Glance

Kennametal India Ltd just dropped its Q1 FY26 results like a precision tool cutting through steel — clean, sharp, and slightly noisy. The company clocked₹2,960 million in revenue, up9.47% YoY, whileprofit before tax hit ₹434 million, a28.78% jump. Profit after tax stayed at ₹314 million, roughly steady QoQ but up from ₹250–₹270 million levels seen a year back.

The Bengaluru-based 75%-owned subsidiary ofKennametal Inc. (USA)continues to manufacture carbide tools and customized machines for auto, defense, and general engineering sectors. The stock currently trades at₹2,097, valuing the company at₹4,609 crore— a small-cap that believes it’s a large-cap trapped in the wrong zip code.

The stock has fallen29% over the past year, perhaps because investors mistook “hard metals” for “hard times.” Yet the fundamentals — debt-free balance sheet, 17.6% ROCE, 12.9% ROE, and a cute little1.91% dividend yield— keep it sparkling like a freshly polished lathe.

And the latest plot twist? The board approved a₹68 crore greenfield capexfor its Machining Solutions Group. Because if you can’t make your tools sharper, just build another factory.

2. Introduction

If you’ve ever wondered what happens when German engineering meets Indian jugaad, Kennametal India is your case study. Born in1938, back when the world was still learning to make good steel, this company now helps others cut it. Literally.

From carbide inserts that slice through automotive crankshafts to massive machining centers that could build your next fighter jet part, Kennametal’s business isn’t glamorous — but it’s essential. They maketools that make tools. You might not notice them, but every car engine, railway wheel, or missile casing probably owes a quiet thanks to them.

Over the years, the company has survived wars, recessions, demonetization, and even Indian bureaucracy — all while staying mostly profitable and debt-free. Its parent,Kennametal Inc., holds 75%, so this isn’t your typical “promoter-driven” drama. The Americans run a tight ship — think more “Six Sigma,” less “Bhai ka startup.”

And yet, while precision tools define the business, the stock’s precision on returns has been questionable lately. Down nearly30% in one year, Kennametal’s price action looks like it’s been attacked by one of its own cutters. But Q1 FY26 shows sparks of life again — new capex, steady margins, and the return of industrial demand.

Still, the question remains — is Kennametal cutting through markets or just cutting its investors’ patience? Let’s unscrew this machine.

3. Business Model – WTF Do They Even Do?

Kennametal India operates intwo main segments:

1. Hard Metal Products (86% of FY23 revenue)– The tough stuff. This segment manufactures and sells carbide cutting tools and metal-cutting inserts — the sharp little pieces that actuallycutmetal in machining processes. These go into automotive, aerospace, energy, and infrastructure applications. If your car engine or wind turbine was made in India, odds are a Kennametal tool helped shape it.
2. Machining Solutions (14%)– Think of this as the “machine tools” business — custom-built, capital-intensive machines that do automated metal cutting. Under theWIDIAandKennametalbrands, this segment provides everything from design to after-sales service.

Their approach is simple but profitable: Sell the razor and the blade. The machines (razors) lock customers into a recurring relationship for inserts and tools (blades). With 9,500+ active clients across sectors, it’s a steady, predictable model.

Exports form17% of sales, while domestic demand contributes the bulk(83%), reflecting India’s manufacturing push. The Bengaluru plant is the crown jewel — complete with a newly inauguratedmetal cutting inserts facility.

The company’s humorless German-American discipline ensures low debt, but also low excitement. Kennametal’s idea of risk-taking is announcing a ₹68 crore capex after three board meetings and a tax refund confirmation.

But hey, that’s what makes it reliable. In an industry full of “will this even work” companies, Kennametal’s motto is more like “it’ll work, but don’t expect fireworks.”

4. Financials Overview

Quarterly Performance (₹ in million)