Kilburn Engg. — Q3 FY26 earnings call

Call held 11 Feb 2026

Management summary

Kilburn Engineering delivered a consistent performance in Q3 FY26, achieving strong consolidated revenue and maintaining healthy EBITDA margins. The company reported a robust order backlog and a significant inquiry pipeline, supporting its ambitious growth targets of reaching ₹800 crores by FY27 and ₹1,000 crores by FY28. Strategic capacity expansions and the formation of a new joint venture for specialized site services are key initiatives to drive future growth and diversification.

Highlights

  • Consolidated top line reached ₹157 crores, with an EBITDA margin of 24% for Q3 FY26.

  • Kilburn standalone reported a top line of ₹105 crores and an operating EBITDA of 25% for Q3 FY26.

  • Year-on-year growth for Kilburn standalone in Q3 was 15% on top line and 16% on EBITDA.

  • The group's order backlog stood at ₹495 crores as of December 31, 2025, with an additional ₹70 crores in orders/LOIs received since January 2026.

  • The inquiry pipeline is robust at over ₹4,000 crores at a consolidated level.

  • FY26 revenue target is maintained at ₹625-650 crores, representing 50% year-on-year growth.

  • Expected EBITDA margin for FY26 is 22-23%, with a medium-term target of 20%+ (internal benchmark 23%).

  • Capacity expansions are underway at Saravalli (6-8 months completion) and M.E Energy Pune (Phase 2), with a total CAPEX of ₹40-45 crores planned over the next 12 months for Kilburn and M.E Energy.

Key financials

  1. Revenue (Standalone) ₹105 Cr +15%YoY
  2. EBITDA Margin (Standalone) 25%
  3. Revenue (Consolidated) ₹157 Cr
  4. EBITDA Margin (Consolidated) 24%
  5. Cash & Bank Balance ₹30 Cr

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

₹495 Cr

as of 2025-12-31 quantified

Inflow this quarter

₹70 Cr

Composition

Mix 3 companies
  • Kilburn Standalone ₹300 Cr 61.2%
  • M.E Energy ₹170 Cr 34.7%
  • Monga Strayfield ₹20 Cr 4.1%

Share of order book by company, derived from disclosed amounts

Pipeline

qualified rfp

Healthy inquiry pipeline at console level

The company expects to open the order book on April 1, 2026, in the range of 500 crores plus, which will help in achieving the 800 crore revenue mark.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹40 Cr New plan — delay in approvals for original FY26 plan
    • Expansion of Kilburn factory at Saravalli
    • Phase 2 expansion at M.E Energy at Pune
    When we had planned for the full year, it was at around 25 crores for Kilburn and around 10 to 12 crores for M.E Energy. But, you know, we did not consume it. There was a slight delay in getting approvals for the expansion. So, for practical reasons, you can assume the same would be spilled into the next financial year. Whilst we have started the expansion in both these locations, but the CAPEX could follow in the next financial year. The total CAPEX for both the companies would be around 40 to 45 crores, for M.E Energy and Kilburn. I also want to mention that we have some CAPEX planned for Monga Sprayfield. We are waiting for, you know, the necessary inputs before we give you those numbers.
  • Debt Gross ₹100 Cr Cost 9.5%
    Borrowing? Gross Borrowing is around ₹100 crores plus, including what we have borrowed from our subsidiary also.
  • M&A Kilburn East End Private Limited Joint venture · Formed

    Offering specialized site and shop fabrication services to EPC companies for various projects in refineries, petrochemicals, steel chemicals, etc.

    Expect to get an order in the range of 50 crores in the next financial year (first year of JV).

    The third update which I would like to give is, we have formed a joint venture company, Kilburn East End Private Limited, for offering specialized site and shop fabrication services to EPC companies for various projects in refineries, petrochemicals, steel chemicals, etc.
  • Liquidity Cash ₹30 Cr Expected improvement in cash flows next year with better banking facilities.
    Cash and bank balance as on 30th December was around ₹30 crores.

Guidance & targets

Revenue

  • FY26 Revenue Revenue · FY26 · High confidence ₹625-650 crores
    We continue to maintain our target of 50 percent growth in top line over the last year, which comes to around revenue of 625 to 650 crores.

    — Mr. Ranjit Lala

  • FY27 Revenue Revenue · FY27 · High confidence ₹800 crores
    In the past, we have mentioned that next year we are targeting a top line of 800 crores and subsequently we would like to be a 1000 crore company.

    — Mr. Ranjit Lala

  • FY28 Revenue Revenue · FY28 · High confidence ₹1000 crores

    — Mr. Ranjit Lala

  • Kilburn Standalone FY26 Revenue Revenue · FY26 · Medium confidence ₹450-500 crores
    450-500.

    — Mr. Ranjit Lala

Profitability

  • FY26 EBITDA Margin Profitability · FY26 · High confidence 22-23%
    The current margin profile looks quite sustainable, and we expect to close the year with EBITDA offering 22 to 23 percent.

    — Mr. Ranjit Lala

  • EBITDA Margin (beyond FY26) Profitability · beyond FY26 · Medium confidence 20%+
    So, beyond the year we have mentioned it will be 20 plus percent, but yes, within the organization we have put a benchmark for 23, but for all our discussions, I have said 20 plus percent.

    — Mr. Ranjit Lala

Growth

  • CAGR for FY27 & FY28 Growth · FY27 and FY28 · High confidence 25%
    No, see, my dear friend, we've always mentioned that in the following years from now, that is FY27 and FY28, we have projected a CAGR of 25%, okay.

    — Mr. Ranjit Lala

Order Inflow

  • Kilburn East End JV Orders Order Inflow · next financial year · High confidence ₹50 crores
    And to begin with, I mean, we would like to go one step at a time. So, in the first year, we expect, which would mean in the next financial year, we expect to get an order in the range of 50 crores, and we would like to execute that.

    — Mr. Ranjit Lala

Capacity

  • M.E Energy Production Capacity Capacity · next year · High confidence almost double (50% increase)
    And we are gearing up with a major expansion of the plant whereby the capacity, in terms of space under crane for production, going up almost close to 50%. So, we'll be equipped with almost double the capacity for catering to this spurt in growth.

    — Mr. K. Vijaysanker Kartha

What to watch in Q4 FY26

Saravalli Factory Expansion Completion

Within 6-8 months (from Feb 2026)
Current Under construction
Target Completion

Why it matters

Essential for increasing Kilburn's manufacturing capacity and supporting overall revenue growth towards the ₹800 crores+ target.

Furthermore, we have commenced the expansion of Kilburn factory at Saravalli, which is expected to complete in the next six to eight months.

Risks & concerns

  • Quarterly Margin Fluctuations

    medium

    EBITDA margins can change from quarter to quarter based on the type of orders being executed and project mix.

    Management acknowledged

  • Project Execution Challenges

    medium

    Project business inherently involves potential cost overruns, unexpected delays, and challenges, contributing to minor margin fluctuations.

    Management acknowledged

  • Raw Material Price Volatility

    low

    While 80% of raw material risk is mitigated by back-to-back arrangements, raw material changes can still contribute to 1-2% margin fluctuations.

    Management acknowledged

Q&A highlights

7 direct
Capacity Utilization & Future Growth Drivers Direct
Yes, we are well booked, I would say, and the expansions that we are talking about, we expect both these expansions to get completed in next, let's say, six to eight months and all this is being done to get to the level of 800 crores plus. ... For FY27, we expect biggest growth coming from ME Energy.

Clarifies that the company is operating at high capacity and future growth will be driven by both Kilburn's expansions and significant contributions from ME Energy, addressing concerns about growth potential.

Asked by Sagar Shah

EBITDA Margin Trajectory Direct
So, to the best of my knowledge, 25-26% was for last quarter, but we had mentioned that through the year, we will maintain EBITDA margin of 22-23%. We have been maintaining that for the last three quarters, or at the last two quarters and this quarter. So, 25-26% happened in last quarter, but through the year it will be around 22-23%, or rather by end of the year it will be 22-23%.

Provides clarity on the expected EBITDA margin for the full year, correcting the analyst's perception of a margin dip and setting realistic expectations for future quarters.

Asked by Abhijit Mitra

Capital Expenditure Plans Direct
When we had planned for the full year, it was at around 25 crores for Kilburn and around 10 to 12 crores for M.E Energy. But, you know, we did not consume it. There was a slight delay in getting approvals for the expansion. So, for practical reasons, you can assume the same would be spilled into the next financial year. ... The total CAPEX for both the companies would be around 40 to 45 crores, for M.E Energy and Kilburn. I also want to mention that we have some CAPEX planned for Monga Sprayfield.

Details the revised CAPEX plans, explaining delays and the new timeline for capacity expansion, which is crucial for understanding future growth enablers.

Asked by Abhijit Mitra

Impact of EU Trade Deal Direct
I do not think Europe is in that position today to offer cheaper equipment. In fact, it is the other way around. You know, in fact, if they have to increase their capacities, they would look at equipment from India and other countries like China, Vietnam, etc. So, in a way, it is beneficial for us. ... However, this would take around 12 to 18 months for the real green shoots to be visible on the ground...

Addresses a macro-economic factor, clarifying that trade deals are expected to be beneficial for Kilburn, positioning India as a competitive supplier, though benefits will materialize over 12-18 months.

Asked by Sahaj (via Navin Agrawal)

Raw Material Price Volatility & Mitigation Direct
Yeah. So, typically whenever we are negotiating new orders with the customers, we are aware of what are the raw materials rate at that point of time, okay. And if we receive an LOI or a purchase order, typically it is the LOI, we immediately block 80% of our raw material with our vendors. So, it is an immediate, you know, back-to-back arrangement. ... That is how we have been mitigating this for the last 2 years.

Explains the company's strategy to mitigate raw material price risks through back-to-back arrangements, providing comfort regarding margin stability despite inflation.

Asked by Abhijit Mitra

Nuclear Sector Opportunities Direct
We had won order from Nuclear Power Corporation, which was for, you know, design, engineering, manufacture and supply of pump room coolers and some vault coolers plus heavy water vapor recovery system. ... The 2nd order was from heavy water board which is for supplying of reactors, exchangers, hydrogen pumps and piping and structures and all. I would say, it's more of a EPC kind of a supply. ... We expect a lot more to happen in the coming years.

Highlights Kilburn's significant involvement and future potential in the growing nuclear sector, showcasing diversification into high-value projects.

Asked by Daksh Malhotra

Working Capital Management Partial
Yeah. So, there is no pass through mechanism over here because all these orders are on a fixed rate basis. Now, whatever fluctuations you are seeing, that's the nature of business. We operate on a POC basis and when you say POC basis, the raw material is already into the factory, it is just that it is under some stage of fabrication, okay. Now, since the overall topline is growing, obviously this impacts the overall work-in-progress.

Clarifies the company's fixed-price contract model and how it manages raw material costs and working capital under a Percentage of Completion (POC) method, explaining the impact of growing topline on WIP.

Asked by Abhijit Mitra

Order Pipeline Consistency Direct
See, you do not see much fluctuation quarter-on-quarter in the enquiries pipeline. You are converting some, there are new opportunities getting uncovered or explored. So, I just mentioned that we have had enquiries between ₹3,800-₹4,000 crores and they have been consistent. So, I would not say they are flat, they are consistent. Definitely, as we move forward, these will grow. If you look at the last 2-3 years, we were somewhere around ₹600-₹800 crores once upon a time and from there we have gone to ₹4,000 crores.

Reassures investors about the health and growth trajectory of the inquiry pipeline, addressing concerns about its perceived flatness and emphasizing a broader historical growth trend.

Asked by Priyesh Babariya

3 min read 7 chapters

Detailed narrative

Q3 FY26 Performance Highlights

Kilburn Engineering reported a consolidated top line of ₹157 crores for Q3 FY26, achieving an EBITDA margin of 24%. On a standalone basis, the company's top line was ₹105 crores with an operating EBITDA of 25%. This represents a robust year-on-year growth of 15% in top line and 16% in EBITDA for the standalone entity, demonstrating consistent performance.

Strong Order Book and Inquiry Pipeline

As of December 31, 2025, the group's order backlog stood at ₹495 crores. Additionally, the company has secured new orders and Letters of Intent (LOIs) worth ₹70 crores since January 2026. The consolidated inquiry pipeline remains healthy at over ₹4,000 crores, indicating strong market traction and future business visibility. Management expects to start the next financial year with an open order book exceeding ₹500 crores.

Ambitious Growth Targets and Margin Outlook

Kilburn Engineering is targeting a 50% year-on-year growth in its top line for FY26, aiming for revenues between ₹625-650 crores. The company expects to close FY26 with an EBITDA margin of 22-23%. Looking ahead, the management projects revenues of ₹800 crores by FY27 and aspires to become a ₹1,000 crore company by FY28, maintaining a Compound Annual Growth Rate (CAGR) of 25% for these years. The medium-term EBITDA margin guidance is set at 20%+, with an internal benchmark of 23%.

Capacity Expansion & New Ventures

To support its growth ambitions, Kilburn has initiated capacity expansions at its Saravalli factory, expected to be completed within 6-8 months, and Phase 2 expansion at M.E Energy in Pune, which will increase its production capacity by nearly 50%. A new joint venture, Kilburn East End Private Limited, has been formed to provide specialized site and shop fabrication services to EPC companies in sectors like refineries and petrochemicals, with an expectation to secure ₹50 crores in orders in its first year of operation (FY27).

Diversified Sectoral Traction

The company is experiencing strong demand across a diverse range of sectors, including petrochemicals, chemicals, soda ash, fertilizers, nuclear, food processing, metals, and recycling. M.E Energy has notably secured significant orders from the Cement and Ferroalloy industries and is actively pursuing opportunities in Sewage Treatment Plants, having already booked ₹5-26 crores in this segment during the quarter. The nuclear sector, in particular, is seen as a high-growth area with significant future potential.

Capital Expenditure and Funding Strategy

The planned CAPEX for Kilburn and M.E Energy, initially around ₹35-37 crores for FY26, has been revised to approximately ₹40-45 crores over the next 12 months due to delays in approval processes, effectively spilling into FY27. This investment is primarily directed towards capacity expansion. The company's gross borrowing stands at over ₹100 crores, with a cost of funds ranging from 9.5-10.5%. The conversion of warrants worth approximately ₹138 crores is anticipated by May 2026, which is expected to bolster the equity base and improve liquidity.

Raw Material and Margin Management

Kilburn operates on a fixed-price contract basis, meaning there is no direct pass-through mechanism for raw material price fluctuations. However, the company mitigates this risk by blocking 80% of raw material requirements with vendors through back-to-back arrangements within 72 hours of receiving an LOI or Purchase Order. While minor margin fluctuations (1-2%) can occur due to raw material changes and project mix, the overall margin profile is considered sustainable, with the company consistently striving for efficiency and better pricing.

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