Kilburn Engg. — Q4 FY25 earnings call

Call held 22 May 2025

Management summary

Kilburn Engineering delivered a strong financial performance in FY25, achieving record revenues and EBITDA, driven by sustained demand and strategic acquisitions. The company boasts a healthy order backlog and a substantial inquiry pipeline, underpinning its ambitious growth targets of 50% revenue CAGR for FY26 and 25-30% thereafter. While cash flow from operations was negative due to working capital dynamics, management is focused on improving efficiency and leveraging its diversified sector presence.

Highlights

  • Kilburn standalone revenue reached a record ₹335 crores for FY25 and ₹102 crores for Q4 FY25.

  • Consolidated revenue for FY25 stood at ₹425 crores with an EBITDA of ₹100 crores, yielding a 23.53% margin.

  • The group closed FY25 with a robust order backlog of ₹483 crores.

  • Kilburn's order intake for FY25 was ₹493 crores, and M.E. Energy's was ₹83 crores.

  • A consolidated inquiry pipeline of over ₹3,000 crores is expected to convert into ₹600-700 crores of order intake in FY26.

  • Management guides for a 50% CAGR in revenue for FY26, targeting ₹675-700 crores, and 25-30% CAGR in subsequent years.

  • Consolidated EBITDA margins are expected to be maintained in the 20-22% range.

  • Negative CFFO of ₹10 crores for FY25 was attributed to working capital buildup from quarter-end dispatches and inventory.

Key financials

  1. Kilburn Standalone Revenue FY25 ₹335 Cr
  2. Kilburn Standalone Revenue Q4 FY25 ₹102 Cr
  3. Consolidated Revenue FY25 ₹425 Cr
  4. Consolidated EBITDA FY25 ₹100 Cr
  5. Consolidated EBITDA Margin FY25 23.5%
  6. CFFO FY25 ₹-10 Cr
  7. M.E. Energy Actual Execution FY25 ₹95 Cr +30%YoY
  8. Monga Strayfield Revenue Reflected FY25 ₹12 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

₹483 Cr

as of 2025-03-31 quantified

Execution

Typically, for Kilburn, execution is 7-12 months; for Monga Strayfield, 3-4 months; for M.E. Energy, 4-9 months.

Composition

  • Export Orders (client type) ₹160 Cr

Pipeline

deal pipeline tcv

Consolidated inquiry pipeline

Cancellations & deferrals

  • deferred: Two projects were not completed and spilled over to the next quarter.
  • on hold: Large order from Granules is on hold.
The company has a strong and growing inquiry pipeline, with a focus on converting larger inquiries. Execution delays for some projects and an order on hold impacted Q4 revenue, but these are expected to be addressed in subsequent quarters.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹25 Cr New plan
    targeting somewhere around ₹25 crores, but that is very fluid as of now. We haven't taken a call. Probably we'll need one more quarter to decide that.
  • Debt Debt disclosed
    • Repayment Part of funds from share issuance will go towards repayment of term loan.
  • M&A Monga Strayfield Acquisition · Closed

    Strategic acquisition to expand product offerings (RF dryers) and enter new sectors like textiles.

    Monga Strayfield's FY25 revenue was close to ₹80 crores, but only ₹12 crores reflected in the balance sheet due to acquisition timing. ₹30 crores cash balance from shareholders was taken as an ICD.

    We completed the acquisition of Monga Strayfield on 27th Jan 2025. ... the year of Monga Strayfield had been close to ₹80 crores, but only 12 crores is being reflected in the balance sheet. ... company paid extra to Monga Strayfield shareholders because they were sitting on ₹30 crores of cash balance. So once the acquisition was completed, we've taken that as an ICD back in our books and M.E. Energy's books.
  • Liquidity Liquidity disclosed The company is adequately capitalized, with free cash flows and equity money from warrants conversion expected to support working capital and growth. ₹200 crores from warrants conversion is committed.
    We have already taken our shareholder approval where the utilisation was mentioned. Part of it will go towards CapEx, part will be going towards repayment of our term loan. Part of that will be towards investment into our subsidiaries. On balance, we will decide what is for working capital as well as some general corporate use. ... you'll be raising up further ₹200 crores into the company, which is already committed in the warrants.

Guidance & targets

Revenue

  • Consolidated Revenue Growth Revenue · FY26 · High confidence 50%
    to achieve 50% growth, which also includes full year revenue of Monga Strayfield.

    — Ranjit Lala

  • Consolidated Revenue Growth Revenue · following years (after FY26) · High confidence 25-30%
    we expect a CAGR of 25% to follow in the following years.

    — Ranjit Lala

  • Monga Strayfield Top Line Contribution Revenue · FY26 · High confidence 90-110 crores
    anything between ₹90 crores to ₹110 crores is what we are looking at, yeah.

    — Ranjit Lala

  • M.E. Energy Standalone Growth Revenue · ongoing · High confidence 20-30%
    We believe we should continue to grow at between 20% to 30% for the standalone business.

    — Amritanshu Khaitan

  • Export Revenue Contribution Revenue · next two to three years · High confidence 20-30%
    We believe we should be aiming to do at least 20% to 30% of our revenue from the export space, which should be the target in the next two to three years.

    — Amritanshu Khaitan

Profitability

  • Consolidated EBITDA Margin Profitability · ongoing · High confidence 20-22%
    we will be able to maintain margins on 20-plus basis. And to be more specific, between 20 and 22, this is what we expect.

    — Ranjit Lala

Order Inflow

  • Conversion Rate of Inquiry Pipeline Order Inflow · ongoing · High confidence 20-25%
    we hope to have a conversion rate of 20% to 25%. This would ensure sufficient backlog through the year

    — Ranjit Lala

  • Expected Order Intake Order Inflow · FY26 · High confidence 600-700 crores
    So if we're having a ₹3,000 crores pipeline, so you can expect ₹600 crores to ₹700 crores of order intake.

    — Ranjit Lala

Capacity

  • Ambernath Factory Contribution to Turnover Capacity · current year (FY26) · High confidence 100 crores
    whatever we had targeted, ₹100 crores of addition into the turnover, that should happen in the current year, yes.

    — Ranjit Lala

Capex

  • FY26 Capex Plan Capex · FY26 · Low confidence 25 crores
    targeting somewhere around ₹25 crores, but that is very fluid as of now. We haven't taken a call. Probably we'll need one more quarter to decide that.

    — Ranjit Lala

What to watch in Q1 FY26

FY26 CapEx Plan Finalization

next quarter
Current Fluid, around ₹25 crores
Target Finalized CapEx plan for FY26

Why it matters

The CapEx plan will indicate future capacity expansion and growth investments.

targeting somewhere around ₹25 crores, but that is very fluid as of now. We haven't taken a call. Probably we'll need one more quarter to decide that.

Risks & concerns

  • Project Execution Delays

    medium

    Two projects worth ₹50-60 crores spilled over from Q4 FY25 to Q1/Q2 FY26, and a ₹70 crore Granules order is currently on hold.

    Management acknowledged

  • Working Capital Management

    medium

    Working capital days increased from 131 to 194, leading to negative CFFO, due to quarter-end dispatches, inventory buildup, and the Monga Strayfield acquisition's cash dynamics.

    Management acknowledged

  • Project Business Volatility

    low

    The project-based nature of the business can lead to quarterly fluctuations in margins and revenue, though management aims for consistent 20-22% EBITDA margins.

    Management acknowledged

Q&A highlights

5 direct
High Margins vs. Lighter Revenue Direct
So on the revenue front, we still had a couple of projects, we were not able to complete them, and we had to take them to the next quarter, that is the current quarter. ... On the margin front, if you recall, we had a project from JESA for OCP for Morocco. So and that execution has commenced, and that was a project with little higher margins.

Clarifies the reasons for both the revenue miss and the exceptionally high margins in the reported quarter, attributing it to project timing and specific high-margin orders.

Asked by Agastya Dave

M.E. Energy Revenue Discrepancy Direct
The figure which you're talking about M.E. Energy, that is net of certain turnover, which is coming in the standalone numbers as well. They get net off because some orders which Kilburn has got, but M.E. has executed it. So actual execution of M.E. Energy is close to ₹95 crores.

Corrects the reported standalone revenue for M.E. Energy, explaining the impact of intercompany transactions and providing a more accurate picture of its operational performance.

Asked by Sagar Shah

Negative Cash Flow from Operations (CFFO) Direct
if you see with the long delivery of our projects and the times that are taken, there is a buildup of debtors as well as our unbilled revenue contract assets. In the last month itself of March, we have dispatched around ₹30 crores to ₹40 crores of billing has been done. So that has led to increase in our debtors also. And even though the cash flows from operations is negative, we have put in funds for the buildup of this inventory through this share issue as well as sort of ICDs, which we have taken from our subsidiary companies.

Provides a detailed explanation for the negative CFFO, linking it to project execution cycles, quarter-end billing, and funding of working capital through internal and external sources.

Asked by Atharva Shiledar

Utilization of Funds from Share Issuance Direct
Part of it will go towards CapEx, part will be going towards repayment of our term loan. Part of that will be towards investment into our subsidiaries. On balance, we will decide what is for working capital as well as some general corporate use.

Outlines the planned allocation of the ₹200 crores raised through warrants, clarifying its use for CapEx, debt repayment, subsidiary investments, and working capital, rather than new acquisitions.

Asked by Bharat Gupta

EBITDA Margin vs. Revenue Growth Guidance Partial
When we are guiding 50%, you can say 50% means that ₹670 crores or ₹675 crores or ₹720 crores. It's not possible for us to give you accurate numbers. There can be times when customers... We have always maintained 20%-plus EBITDA margin for last many quarters, and we have successfully achieved or beaten those estimates.

Addresses the analyst's concern about EBITDA growth not matching revenue growth, emphasizing the variability of project business and reiterating confidence in maintaining 20-22% EBITDA margins despite potential fluctuations.

Asked by Samir Palod

Increase in Working Capital Days Direct
It is the nature of the business that there are certain months where there's heavy dispatches, which are taking place. And because of that, you will only see the balance sheet on two dates, 30th September and 30th March. So that's why these changes happen. Plus close to ₹25 crores has come in as ICD from the subsidiary, which is the money we paid the shareholders of Monga Strayfield. That also has impacted this.

Explains the reasons behind the increase in working capital days, linking it to operational cycles and the impact of the Monga Strayfield acquisition, and outlines strategies for future improvement.

Asked by Santhosh Varma

CapEx Guidance for FY26 Partial
targeting somewhere around ₹25 crores, but that is very fluid as of now. We haven't taken a call. Probably we'll need one more quarter to decide that.

Provides an initial CapEx estimate for FY26 but indicates that the plan is still fluid and a final decision will be made in the next quarter, signaling potential changes.

Asked by Naman Bhansali

NSE Listing Timeline Partial
The Board has approved it that we are going to apply for the listing, then it is up to NSE to see what is the process and the time line, but we can't give a particular date.

Confirms the company's intent to list on NSE, with Board approval, but clarifies that the exact timeline is dependent on regulatory processes, managing investor expectations.

Asked by Priyanka Patel

2 min read 6 chapters

Detailed narrative

Strong Financial Performance and Ambitious Growth Outlook

Kilburn Engineering reported its highest-ever standalone revenue of ₹335 crores for the full year FY25 and ₹102 crores for Q4 FY25. On a consolidated basis, the company achieved a top line of ₹425 crores with an EBITDA of ₹100 crores, resulting in a 23.53% EBITDA margin. Management has set an ambitious target of 50% CAGR for revenue in FY26, aiming for ₹675-700 crores, and projects a 25-30% CAGR for subsequent years, signaling strong confidence in its growth trajectory.

Robust Order Book and Expanding Inquiry Pipeline

The group concluded FY25 with a healthy order backlog of ₹483 crores. Kilburn's standalone order intake for the year was ₹493 crores, complemented by M.E. Energy's ₹83 crores. The consolidated inquiry pipeline has expanded to over ₹3,000 crores, up from ₹2,000 crores in FY24, with an expected conversion rate of 20-25%, which should translate to ₹600-700 crores in new order intake for FY26. Export orders currently constitute ₹160 crores of the existing backlog.

Strategic Acquisitions and Capacity Enhancements

The acquisition of Monga Strayfield was completed in January 2025, with its full-year revenue contribution expected to be ₹90-110 crores in FY26. M.E. Energy, acquired a year prior, recorded actual execution of ₹95 crores in FY25, despite intercompany adjustments. The Ambernath factory is now fully operational and is projected to add ₹100 crores to turnover in FY26. M.E. Energy's Phase 1 expansion is also complete, with Phase 2 anticipated to be operational by mid-H2, further boosting capacity.

Diversified Sector Focus and Margin Stability

Kilburn Engineering benefits from a diversified presence across multiple sectors, including nuclear, carbon black, fertilizers, petrochemicals, steel, chemical, and textiles (through Monga Strayfield). This diversification provides resilience against sector-specific slowdowns. The company aims to maintain consolidated EBITDA margins in the 20-22% range, with specific high-margin projects like the OCP Morocco order contributing positively to profitability in Q4 FY25.

Working Capital Dynamics and Cash Flow Management

Despite strong operational performance, CFFO for FY25 was negative ₹10 crores. This was primarily attributed to a buildup of debtors and unbilled revenue, with ₹30-40 crores of billing dispatched in March alone. The company is utilizing funds from a recent ₹200 crore share issuance (from warrants) and ICDs from subsidiaries to manage working capital and repay term loans. Management is actively working on improving working capital days by securing more advances and better credit terms from vendors.

Future Growth Avenues and International Expansion

The company sees significant growth potential in sectors like cement, where M.E. Energy is focusing on a market size of ₹4,000-5,000 crores. The pharma segment, initiated with a pilot order from Granules, is also a promising avenue pending successful customer trials. Kilburn is targeting to increase its export revenue contribution to 20-30% of total revenue within the next two to three years, leveraging its capabilities across all three entities in the global drying solutions market, estimated at $2-3 billion.

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