Kilburn Engg. — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

Kilburn Engineering reported robust Q2 FY26 results, demonstrating significant year-on-year growth in both standalone and consolidated topline and EBITDA. The company maintains a strong order book and inquiry pipeline, supported by strategic CapEx plans for capacity expansion across its facilities. Management reiterated ambitious growth targets for the current and next fiscal years, emphasizing sustainable margins and diversification into new sectors and export markets.

Highlights

  • Kilburn Standalone topline reached ₹114.79 crores, marking a 47% YoY growth.

  • Standalone EBITDA stood at ₹26.39 crores, growing 48% YoY, with an EBITDA margin of 22.99%.

  • Consolidated topline achieved ₹154 crores with an EBITDA margin of approximately 27%.

  • The group's unexecuted order pipeline aggregated to ₹610 crores as of the call date.

  • An inquiry pipeline of ₹4,000 crores indicates strong future traction, with a 20-25% conversion rate expected.

  • FY26 consolidated topline guidance is maintained at 50% growth, targeting approximately ₹650 crores, with an EBITDA margin of 26%.

  • Planned CapEx includes ₹25 crores for Saravali and ₹10-15 crores for ME Energy, expected to add ₹100 crores and ₹75-100 crores in revenue respectively.

Key financials

  1. Standalone Revenue ₹114.79 Cr +47%YoY
  2. Standalone EBITDA ₹26.39 Cr +48%YoY
  3. Standalone EBITDA Margin 23%
  4. Consolidated Revenue ₹154 Cr
  5. Consolidated EBITDA Margin 27%

What they filed

Q1 FY27: revenue down 9.3%, net profit down 38.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue104 108 127 129 154 +48%157 +45%189 +49%117 −9%
EBITDA23 23 36 33 40 +74%36 +57%38 +6%21 −36%
Net profit15 15 20 21 27 +80%23 +53%25 +25%13 −38%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹610 Cr

as of 2025-11-13 quantified

Inflow this quarter

₹129 Cr

Execution

typically around 7 to 12 months from case-to-case

Composition

  • Chemical (segment)
  • Fertilizers (segment)
  • Nuclear (segment)
  • Metal Recovery (segment)
  • Food (Monga Strayfield) (segment)
  • Repeat Customers (client type) 25%

Pipeline

qualified rfp

Inquiry pipeline at group level

The company has a strong order backlog and a robust inquiry pipeline, with a historical conversion rate of 20-25% and a gestation period of 7-12 months for order conversion.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Brownfield expansion at Saravali ₹25 Cr
    • Expansion at ME Energy, Saravali ₹10 Cr
    • Expansion at Monga Strayfield
    So, we had planned a CapEx of 25 crores for the brownfield expansion at Saravali. ... We are also planning a CapEx of around 10 to 15 crores at ME Energy, Saravali, which would probably be commenced somewhere in end of next quarter. ... And the third one, which would probably come up only in the next financial year, would be at Monga Strayfield.
  • Debt Net ₹0 Cr Cost 10.5%
    • New borrowing Short-term borrowing increased from 27 crores to 40 crores. ₹13 Cr
    our term debt has not gone up. Our term debt has gone down. So, we are virtually net debt zero. We have cash balance. We have fixed deposits. ... Currently, it is around 10.5% to 11%. You can say 10.5%.
  • Liquidity Liquidity disclosed Company is virtually net debt zero with cash balance and fixed deposits.
    So, we are virtually net debt zero. We have cash balance. We have fixed deposits.

Guidance & targets

Revenue

  • FY26 Consolidated Topline Growth Revenue · FY26 · High confidence 50%

    Previously 40% → 50%

    So, actually, we had upped our guidance to 50% for the full year. We believe we should achieve the 50% topline growth with upward bias.

    — Mr. Amritanshu Khaitan

  • FY26 Consolidated Topline Revenue · FY26 · High confidence ₹650 crores
    We continue to maintain target of 50% growth in topline over the last year, which is approximately 650 crores.

    — Mr. Ranjit Lala

  • CAGR Growth (next 2-3 years) Revenue · next 2-3 years · High confidence 25%
    next two to three years we expect a growth of around 25% CAGR.

    — Mr. Ranjit Lala

  • FY27 Topline Growth Revenue · FY27 · High confidence 25%
    and a growth of 25 percent on that for the next year. ... For the following year, we expect topline growth of 25%, with a 25% EBITDA margin.

    — Mr. Ranjit Lala

  • Long-term Revenue Target Revenue · next 3-4 years · Medium confidence ₹1,000 crores
    I can assure you that the KEL team is very much committed to the vision that we have set for ourselves for the next 3-4 years, including the target of 1,000 crores.

    — Mr. Ranjit Lala

Profitability

  • FY26 EBITDA Margin Profitability · FY26 · High confidence 26%
    we expect to close the year with EBITDA in the range of 26%.

    — Mr. Ranjit Lala

  • EBITDA Margin (next 2-3 years) Profitability · next 2-3 years · High confidence 23-25%
    And the EBITDA expected would be in the range of, again 23 to 25%.

    — Mr. Ranjit Lala

  • FY27 EBITDA Margin Profitability · FY27 · High confidence 25%
    For the following year, we expect topline growth of 25%, with a 25% EBITDA margin.

    — Mr. Ranjit Lala

Tax

  • Nominal Tax Rate Tax · Ongoing · High confidence 25-27%
    The nominal tax rate of 25-27%, that is what you should consider for.

    — Mr. Sachin Vijayakar

Export

  • Export Revenue Share Export · Future · Medium confidence 30-40%

    From 15% today

    Earlier, it used to be around 15% of revenue. We believe this can now be 30 to 40% of the revenue.

    — Mr. Amritanshu Khaitan

Headcount

  • Employee Benefit Expenses Growth Headcount · CAGR · High confidence 15-18%
    For employee benefit expenses, you can expect a yearly increase of around 12 to 15%. This is as far as the current employees are concerned. And as far as the new onboarding is concerned, that will be another 5 to 10%. So overall 15 to 18% on CAGR basis.

    — Mr. Ranjit Lala

What to watch in Q3 FY26

Completion of Saravali CapEx

Q2 FY27
Current Ongoing
Target Completion by Q2 FY27

Why it matters

This CapEx is expected to add ₹100 crores in revenue, crucial for future growth.

So, we had planned a CapEx of 25 crores for the brownfield expansion at Saravali. ... we expect the expansion to complete by end of Quarter 2 of next financial year.

Risks & concerns

  • Negative cash flow due to high dispatches and increased debtors

    medium

    Cash flow was negative due to high physical dispatches (₹142 crores in Q2, ₹94 crores in September) leading to increased debtors, which is expected to normalize in coming quarters.

    Analyst acknowledged

  • Impact of tariff wars and global uncertainties on export orders

    low

    Management stated that tariffs have not impacted order intake, and India's agreements with various countries mitigate this risk, keeping things 'all right'.

    Analyst downplayed

Q&A highlights

8 direct
Long-term growth outlook and EBITDA margins Direct
next two to three years we expect a growth of around 25% CAGR. And the EBITDA expected would be in the range of, again 23 to 25%.

Clarified the company's medium-term growth and profitability expectations post-consolidation.

Asked by Mr. Dinesh Kulkarni

Increase in receivables and cash flow Direct
this last quarter we have physically dispatched around 142 crores. In the last month i.e. in the month of September, in fact we dispatched around 94 crores. That money will come subsequently. That is the reason for the increase in the debtors.

Explained the reason for negative cash flow and increased receivables as a result of high physical dispatches towards quarter-end.

Asked by Mr. Khush

Sustainability of EBITDA margin Direct
Primarily, I would say that two reasons have contributed. One is the scale of operations, and second is the mix of the orders that we have executed.

Provided insight into the drivers behind the sustainable higher EBITDA margins, attributing it to scale and order mix.

Asked by Mr. Tejas

Increase in tax incidence Direct
Last year, we had carry forward losses, which got used up by September. That is why we had less tax outgo last year. So, now those tax... carry forward losses are over. So, we have to pay tax now, full of, on the entire profit.

Clarified the reason for the higher tax rate, indicating a return to normal tax incidence after utilizing carry-forward losses.

Asked by Mr. Andrey Purushottam

Addressable export market and strategy Direct
Earlier, it used to be around 15% of revenue. We believe this can now be 30 to 40% of the revenue. We have focus on the domestic market, but we are now focusing as well on tapping the export market

Outlined the company's strategy to increase export contribution significantly, leveraging technology tie-ups and in-house manufacturing.

Asked by Mr. Andrey Purushottam

ME Energy's performance and contribution to consolidated growth Direct
ME Energy can be a driver for high growth. Their order booking is over 150 crores till October, which is record order booking for them. This will automatically ensure that the topline goes above 100 crores.

Highlighted ME Energy's strong order booking and its potential to drive consolidated growth, especially after Kilburn's acquisition and support.

Asked by Mr. Sagar Shah

Capacity utilization and future growth drivers Direct
As far as the utilization is concerned, I would say that for ME Energy and Kilburn, it would be in the range of 90 to 95%. ... we are very comfortable to scaling up over 1,000 crores from a capacity point of view.

Addressed concerns about high capacity utilization by explaining ongoing CapEx plans and the ability to scale up to a ₹1,000 crore revenue target.

Asked by Mr. Sagar Shah

Increase in short-term borrowing and debt status Direct
our term debt has not gone up. Our term debt has gone down. So, we are virtually net debt zero. We have cash balance. We have fixed deposits. ... the short-term debt... has gone up purely because Monga Strayfield, which is our subsidiary, was sitting on cash, and we took that as a short-term loan into Kilburn's books.

Clarified that the increase in short-term borrowing was due to internal group financing and that the company remains virtually net debt zero.

Asked by Mr. Prasad M

2 min read 6 chapters

Detailed narrative

Strong Q2 FY26 Performance and Growth Outlook

Kilburn Engineering reported a robust Q2 FY26, with standalone topline growing 47% YoY to ₹114.79 crores and EBITDA increasing 48% YoY to ₹26.39 crores, resulting in a 22.99% EBITDA margin. On a consolidated basis, the company achieved a topline of ₹154 crores with an EBITDA margin of approximately 27%. Management expressed confidence in sustaining a 50% topline growth for FY26, targeting ₹650 crores, and an EBITDA margin of 26%. For the next 2-3 years, a CAGR growth of 25% and an EBITDA margin in the range of 23-25% are projected.

Robust Order Book and Inquiry Pipeline

The group concluded Q2 with an order backlog of ₹492 crores, and additionally secured orders/LOIs worth ₹129 crores from October 1st, bringing the total unexecuted order pipeline to ₹610 crores. The inquiry pipeline stands at a substantial ₹4,000 crores, with a historical conversion rate of 20-25% and a typical gestation period of 7-12 months. Key sectors driving this traction include chemical, fertilizers, nuclear, metal recovery, and food processing (for Monga Strayfield). ME Energy alone has an unexecuted order book of around ₹180 crores.

Strategic CapEx for Capacity Expansion

Kilburn Engineering has planned significant CapEx to support future growth. A brownfield expansion at Saravali, costing ₹25 crores, is expected to be completed by Q2 FY27 and will add an estimated ₹100 crores in revenue. Additionally, a CapEx of ₹10-15 crores is planned for ME Energy, commencing by the end of Q3 FY26, which is anticipated to generate an extra ₹75-100 crores in revenue. Further CapEx for Monga Strayfield is slated for FY27, with details to be announced.

Debt Management and Liquidity Position

While short-term borrowing increased from ₹27 crores to ₹40 crores, primarily due to an internal loan from subsidiary Monga Strayfield, the company's term debt has decreased, making it virtually net debt zero with healthy cash balances and fixed deposits. The current cost of debt is between 10.5% and 11%. Management indicated that the negative cash flow observed this quarter is a temporary effect of high physical dispatches towards quarter-end, with receivables expected to convert into cash in the coming months.

Focus on Exports and Technology Tie-ups

The company aims to significantly increase its export revenue share from the current 15% to 30-40%. This strategy is bolstered by technology tie-ups, such as with Komline Sanderson (US) and ongoing discussions with NARA (Japan), which enable Kilburn to market and manufacture advanced products for various geographies. These partnerships are expected to open new opportunities and leverage Kilburn's manufacturing expertise for international markets.

Tax Rate Normalization and Employee Costs

The company's tax incidence has increased to a nominal rate of 25-27% as carry-forward losses from previous years were fully utilized by September. This normalization means the company will now pay full tax on its profits. Employee benefit expenses are projected to grow at a CAGR of 15-18%, accounting for both existing employee increments (12-15%) and new onboarding (5-10%).

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