At a Glance
Kirloskar Brothers Ltd (KBL) just dropped its Q1 FY26 numbers, and the pumps are pumping, but sales seem to have tripped on a hose. Revenue came in at ₹979 Cr (down 5% YoY), operating margins slipped to 11% (from 14% last quarter), and net profit chilled at ₹68 Cr (flat like a stale soda). The stock trades at a P/E of 36.7—basically priced like a tech startup in an engineering suit. Promoters still hold a comfy 65.95%, FIIs are slowly creeping in (6.27%), and the market cap sits at ₹15,522 Cr. In short, growth is meh, profits are steady, and valuation is a head-scratcher.
Introduction
Let’s talk about pumps. No, not the ones at your local petrol station, but the industrial beasts manufactured by Kirloskar Brothers Ltd. They’ve been around forever, part of the iconic Kirloskar Group, and they supply to every water project that politicians love to inaugurate before elections. The company’s products quietly push water through power plants, irrigation channels, and municipal supply lines while shareholders hope profits will gush just as effortlessly.
But here’s the twist: while profits have grown at a flashy 42% CAGR over five years, sales growth is crawling at 7%. The stock is priced at 7.4x book value, making it look like a Ferrari engine inside a Maruti shell. Investors are left wondering—will KBL surge like a high-pressure pump or sputter like a rusty one?
Business Model (WTF Do They Even Do?)
KBL designs, manufactures, and sells pumps, valves, motors, and hydro turbines. They also take on large-scale infrastructure projects for water supply, power plants, and irrigation—basically, if it moves fluids, KBL wants in.
Their portfolio is massive: 250+ product categories, 100,000+ SKUs, and clients across 12 industries. The company runs an asset-light model for many segments, outsourcing heavy lifting where possible. The real moolah comes from projects and aftermarket services. But the segment mix is skewed: high-value projects are lumpy, making quarterly results swing like a pendulum.
So yes, they sell pumps. But these are not your neighborhood water pumps—they are multi-crore beasts that can flood or save cities. Unfortunately, their sales pipeline isn’t as strong as their pump pressure lately.
Financials Overview
Let’s hit the numbers like an auditor with a caffeine overdose:
- Q1 FY26 Revenue: ₹979 Cr (↓5% YoY)
- EBITDA: ₹112 Cr (margin 11%)
- PAT: ₹68 Cr (flat YoY, ↓51% QoQ)
- EPS (Q1): ₹8.40
TTM EPS: ₹52.48
Fresh P/E Calculation: Current Price ₹1,953 / Annualized EPS (8.40×4=₹33.6) = P/E ~58.1
(Yes, higher than Screener’s 36.7 because we annualized a weak quarter—don’t @ me.)
Colorful commentary? The margins are decent, profits steady, but the topline is like your gym attendance—disappointing despite high energy.
Valuation
We’ll flex three methods like a CFA nerd at a party:
- P/E Method:
- Peer median P/E ~45
- Applying 35–40 (slightly conservative) on FY26E EPS ₹50 → Fair Value: ₹1,750–₹2,000
- EV/EBITDA Method:
- TTM EBITDA ₹609 Cr, EV/EBITDA peer ~15x → EV ₹9,135 Cr
- Net debt negligible, Fair Value ~₹1,850/share
- DCF (Quick & Dirty):
- Assuming 10% growth, 12% discount, terminal 3% → Fair Value ~₹1,800
Fair Value Range: ₹1,750–₹2,000 (stock is at upper band, no margin of safety).
What’s Cooking – News, Triggers, Drama
- New Independent Director: Harsh Vardhan Shringla (ex-Foreign Secretary). Because why not have a diplomat when pumps are leaking?
- Order Book: Healthy, but execution remains a question.
- FIIs Increasing Stake: 6.27%—the smart money is sniffing something.
- Risks: Raw material volatility, project delays, lumpy revenue.
Balance Sheet
| (₹ Cr) | Mar 2025 |
|---|---|
| Assets | 3,666 |
| Liabilities | 1,391 |
| Net Worth | 2,093 |
| Borrowings | 182 |
Auditor Remark: Borrowings are lower than my coffee intake—solid. But asset turnover is as slow as government approvals.
Cash Flow – Sab Number Game Hai
| (₹ Cr) | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Operating CF | 329 | 370 | 386 |
| Investing CF | -73 | -166 | -236 |
| Financing CF | -169 | -159 | -92 |
Remarks: Ops cash flow strong, investing cash burnt in capex, financing outflow looks like dividends being stingy.
Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 21.6% |
| ROCE | 27.6% |
| P/E | 58.1 |
| PAT Margin | 14% |
| D/E | 0.09 |
Remarks: ROE and ROCE scream sexy, but P/E is stressy—like a fit guy with expensive taste.
P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 3,730 | 4,001 | 4,492 |
| EBITDA | 400 | 520 | 609 |
| PAT | 236 | 350 | 419 |
Remarks: Revenue crawling, profits flying—clearly margins are doing all the heavy lifting.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Cummins India | 10,391 | 1,995 | 50.1 |
| Elgi Equipments | 3,510 | 349 | 51.2 |
| Kirloskar Bros | 4,440 | 420 | 58.1 |
| KSB | 2,584 | 255 | 57.9 |
Remarks: KBL is priced richer than peers with less revenue growth. Investors must love pumps.
Miscellaneous – Shareholding, Promoters
- Promoters: 65.95% – rock solid
- FIIs: 6.27% – growing interest
- DIIs: 9.79% – steady hands
- Public: 18.01% – losing interest
Promoters are the Kirloskar family—industrial royalty with a century-old legacy. Drama? None publicly.
EduInvesting Verdict™
Kirloskar Brothers is like that old-school engineer who still wins awards: robust margins, healthy ROE, and low debt. Yet, growth is slow, and the stock is priced like it’s inventing AI-powered pumps.
Past performance? Stellar profit growth, but revenue trends are tepid.
Upcoming tailwinds? Urbanization, water projects, Make-in-India push.
Headwinds? Execution delays, order lumpiness, and overvaluation risk.
SWOT Analysis
- Strengths: Strong brand, low debt, margin improvement.
- Weaknesses: Low revenue growth, high valuation.
- Opportunities: Government water/irrigation projects, exports.
- Threats: Competition, raw material prices, project delays.
Final Word: Great company, good business, but the stock is acting too premium. Watch for dips, watch the order book, and keep an eye on margins—because that’s where the magic is.
Written by EduInvesting Team | 01 Aug 2025SEO Tags: Kirloskar Brothers, Pumps Industry, Capital Goods, Q1 FY26 Results
