🔍 At a Glance
Kirloskar Industries Ltd (BSE: 500243, NSE: KIRLOSIND) reported ₹6,608 Cr in revenue for FY25 — a mere 3% YoY growth. Net profit slipped again to ₹308 Cr from ₹361 Cr last year, continuing its multi-year decline from FY23’s ₹460 Cr peak. Once a windmill of wealth (literally), Kirloskar Industries now feels like an inheritance nobody wants to manage.
Despite trading at just 0.64x book value, the stock is down ~40% from its 52-week high and has a 5-year stock CAGR of 48% (thank KFIL for that). But with declining ROCE, subpar dividend payouts, and real estate rentals masquerading as income, the question remains:
Can a company built on cast iron, wind power, and family inheritance adapt to modern markets — or will it just keep leasing out its legacy?
🏢 About the Company
Kirloskar Industries Ltd (KIL) is part of the Kirloskar Group — one of India’s oldest industrial dynasties. KIL operates in:
- 🏭 Iron Castings — through Kirloskar Ferrous Industries Ltd (KFIL), where it holds a 51% stake.
- 🏢 Investments & Real Estate — leasing out properties in Pune, New Delhi, and Jaipur to group firms.
- 🌬️ Wind Power Generation — also a segment (but let’s be honest, a side hustle).
- 📈 Financial Investments — primarily in group entities.
Basically: 90% of its standalone income comes from dividends and rent. Corporate landlord meets industrial heir.
🧑💼 Key Managerial Personnel (KMP)
- Sanjay Kirloskar – Chairman of the group, from the 130-year-old Kirloskar family.
- Mr. Yatindra Sharma – Newly appointed MD in FY25.
- Mr. Kiran Dhopavkar – CFO
And of course, half the boardroom meetings are likely about dinner plans — this is a true family-run business.
📊 Financials Snapshot (Consolidated)
| FY | Revenue (₹ Cr) | EBITDA (₹ Cr) | Net Profit (₹ Cr) | OPM (%) | EPS (₹) | ROCE (%) |
|---|---|---|---|---|---|---|
| FY21 | 2,080 | 482 | 311 | 23% | 168.71 | 19% |
| FY22 | 3,810 | 685 | 316 | 18% | 197.95 | 15% |
| FY23 | 6,490 | 886 | 460 | 14% | 220.11 | 13% |
| FY24 | 6,396 | 965 | 361 | 15% | 201.86 | 11% |
| FY25 | 6,608 | 769 | 308 | 12% | 143.18 | 7% |
EPS down 35% in two years. Profit peaked in FY23, and now we’re riding a not-so-fun windmill back down.
🧮 Forward-Looking Fair Value (FV) Estimate
Let’s do a DCF-ish thumb rule:
- Assume normalized EPS returns to ₹180–₹200 over the next 2–3 years (bullish case).
- Assign a fair multiple of 20x given low growth and capital efficiency.
🎯 FV Range: ₹3,600–₹4,000
With the current price around ₹3,870, the stock is… almost there. But only if management stops burning cash on wind and family nostalgia.
🌍 Segment Breakdown
- KFIL (Iron Castings): The golden goose. Drives 90%+ of revenue. Any slowdown here drags the entire ship.
- Real Estate & Investments: Around ₹4,730 Cr worth of investments and ₹6,000+ Cr of book value. But illiquid and hard to monetize.
- Wind Energy: Every legacy group needs one ESG certificate.
🧱 Balance Sheet Walkthrough (FY25)
| Metric | Value |
|---|---|
| Equity Capital | ₹10 Cr |
| Reserves | ₹6,284 Cr |
| Borrowings | ₹1,283 Cr |
| Total Assets | ₹11,651 Cr |
| Investments | ₹4,730 Cr |
| CWIP (Work-in-Progress) | ₹651 Cr |
| ROE | 3% |
🧾 Observations:
- Low ROE for a company sitting on ₹6,000+ Cr net worth.
- Asset-heavy but cash-light.
- Working Capital Days steady at ~47.
- High CWIP — where exactly is this money being deployed?
📉 Shareholding Pattern (Mar 2025)
| Category | % Holding |
|---|---|
| Promoters | 72.56% |
| FIIs | 0.59% |
| DIIs | 1.90% |
| Public | 24.96% |
FIIs and DIIs combined = 🍃 negligible. Public = bagholding.
📈 Long-Term Stock Performance
- 5-Year CAGR: 48%
- 3-Year CAGR: 43%
- 1-Year Return: -37%
So you made a fortune in 2021–2023… and now you’re giving it all back like a charitable Kirloskar Trust.
📦 Dividend Details
- FY25 Dividend: ₹13/share → ~0.34% yield
- Dividend payout ratio: 9%
🧂 That’s less of a dividend and more of a token gesture. The payout ratio has hovered around 5–9% for years.
🧠 EduInvesting Take
Kirloskar Industries is:
- ✅ Sitting on huge assets
- ✅ Owns a powerful cash cow in KFIL
- 🚫 Has no real strategy beyond dividends and rentals
- 🚫 ROCE and ROE are deteriorating
- 🚫 Earnings have dropped 33% since FY23
So if you’re investing here, you’re betting on:
A: The Kirloskar family figuring out how to unlock value
B: A major corporate restructuring
C: A buyout, merger, or magic.
Until then, the company feels like a castle with no king — just caretakers dusting off old trophies.
⚠️ Risks & Red Flags
- Heavy dependence on a single subsidiary (KFIL)
- Asset-heavy, return-light structure
- Low free float, low FII/DII interest
- Dividend culture is stingy despite high reserves
- ROCE at 7%, ROE at 3% — not even beating FD rates
Verdict: Kirloskar Industries is not a growth stock. It’s a legacy stock. It may or may not rise — but it sure will rent you a nice office in Pune while you wait.
Author: Prashant Marathe
Date: 11 June 2025
Tags: Kirloskar Industries, KIRLOSIND, KFIL, Kirloskar Ferrous, Legacy Stocks, Wind Energy, Real Estate Investing, SME Industrial, Pune Office Leasing, EduInvesting 5-Year Recap Series
