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.