Kirloskar Ferrous Industries Ltd Q1 FY26: “Pig Iron Profits Cast in Steel, Tubes Rolling In – But ROE Still Running on Half Cylinder”
1. At a Glance
Kirloskar Ferrous (KFIL) is the foundry king that decided pig iron was too boring, so it bought ISMT and now makes seamless tubes, special steels, and castings for tractors, trucks, and your neighbour’s borewell pump. Q1 FY26 saw ₹1,685 Cr revenue (+8.5% YoY), PAT at ₹96 Cr (+26.7% YoY), and EPS ₹5.8. The stock trades at 27x earnings, which means the market thinks pig iron is suddenly sexy. Debt is ₹1,278 Cr, but hey—they’ve also got their own iron ore mines now.
2. Introduction
KFIL is like that kid in college who started with one subject (pig iron) but then took every elective possible: castings, steels, tubes, renewable energy, even oxygen plants during Covid. Once just a pig iron supplier, it’s now a vertically integrated ferrous hub.
With 22–25% pig iron market share, 19–20% castings share, and leading producer of bearing steel, KFIL is a formidable mid-cap in the Kirloskar family. Post the ISMT merger, tubes alone form 32% of revenues—diversification done right.
But don’t get carried away. While revenues grew at 29% CAGR over 5 years, profit growth has slowed in the last 3 years (-7%). Why? Cyclical margins, high depreciation from new assets, and a tendency to announce ₹800 Cr capex every other quarter like it’s Diwali shopping.
3. Business Model – WTF Do They Even Do?
Pig Iron (31% of sales): Foundry-grade pig iron for auto and engineering. Basically the raw material backbone.
Castings (26%): Cylinder blocks, heads, housings for tractors, CVs, and engines. Customers include top OEMs and Tier-1s.
Steel (8%): Bearing & special steels for auto and fasteners. 76% of this goes to bearing industry.
Seamless Tubes (32%): PQF and Assel mill tubes for oil & gas, mining, defense, and boilers. Biggest revenue driver post ISMT merger.
By-products (3%): Coke, slag, etc. because nothing goes to waste—except maybe investor patience during downturns.
KFIL is now closer to a mini Tata Steel (but with tractors instead of Tata Motors backing it).
