Concall AI

Kilburn Engg. — Q4 FY26 earnings call

Call held 27 May 2026

Management summary

Kilburn Engineering reported strong Q4 and full-year FY26 results, with consolidated revenue reaching INR629 crores and EBITDA margins over 25%. The company aims for 20-25% revenue growth and INR800-1,000 crores in order intake for FY27, supported by a robust INR4,000 crore inquiry pipeline and ongoing capacity expansions. However, geopolitical challenges have led to order intake delays and increased trade receivables, impacting standalone cash flow, though management expects normalization.

Highlights

Consistent quarterly performance and strong full-year results for FY26, with consolidated top line reaching INR629 crores and EBITDA of 25.13%.
Robust inquiry pipeline exceeding INR4,000 crores across various sectors, indicating strong future demand.
Targeting significant order intake of INR800-1,000 crores and revenue of INR750-800 crores for FY27, representing 20-25% growth.
Committed to maintaining healthy EBITDA margins of 20% plus, with aspirations for 22-23%.
Capacity expansions at Saravali and M.E. Energy Phase 2 are on track for completion by Q2 FY27, supporting future growth.

Concerns

Geopolitical challenges have impacted order intake timeliness, delaying some major orders by a quarter.
Trade receivables increased by INR100 crores on a standalone basis, contributing to negative cash flow from operations.
Working capital days increased from 169 to 184 days in FY26, though expected to normalize with collections.
Material costs have been increasing quarter-on-quarter, requiring active management to protect margins.

Key financials

3 periods

Headline

Trade Receivables Increase (Standalone)
₹100 Cr
Cash Flow from Operations (Standalone)
₹-17 Cr
Working Capital Days
184 days
Depreciation
₹14 Cr

Q4

Standalone Top Line
₹134 Cr
Standalone EBITDA
25.1%
Consolidated Top Line
₹189 Cr
Consolidated EBITDA
22.9%

FY26

Standalone Top Line
₹448 Cr
Standalone EBITDA
25.9%
Consolidated Top Line
₹629 Cr
Consolidated EBITDA
25.1%

What they filed

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

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	104	108	127	129	154 +48%	157 +45%	189 +49%	117 −9%
Expenses	81	85	91	96	114	121	151	96
EBITDA	23	23	36	33	40 +74%	36 +57%	38 +6%	21 −36%
Margin	22%	22%	28%	26%	26%	23%	20%	18%
Other income	0	1	1	3	4	2	7	4
Interest	3	3	5	3	3	3	5	4
Depreciation	1	2	3	3	3	3	3	3
Profit before tax	19	20	29	30	37 +95%	32 +60%	37 +28%	18 −40%
Tax rate	20%	22%	31%	28%	28%	28%	33%	25%
Net profit	15	15	20	21	27 +80%	23 +53%	25 +25%	13 −38%
EPS	3.36	3.19	4.30	4.40	5.23	4.46	4.69	2.34

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

₹467 Cr

as of 2026-03-31 quantified

Composition

Fertilizer (segment)
Nuclear (segment)
Petrochemicals (segment)
Offshore Gas Vapor Recovery (segment)
Sludge Processing (segment)
Ferrous Alloy (segment)
Steel (segment)
Defrosting (segment)
Textiles (segment)
Food Processing (segment)
Middle East (geography)
Far East (geography)

Pipeline

other

Strong inquiry pipeline across various sectors

Cancellations & deferrals

deferred: Orders expected to close in Q4 FY26 delayed to next 2-3 months due to geopolitical challenges.
deferred: Moroccan order of INR50-60 crores receivable in the next 2-3 months.
on hold: Granules India order is still on hold.

Overall positive about the business scenario despite geopolitical challenges causing some order delays.

Source: Prepared remarks

Capital allocation

medium confidence

Capex ₹40 Cr
- Expansion of Kilburn factory at Saravali
- Phase 2 expansion of M.E. Energy at Pune
- Overall capex program
Furthermore, the expansion of the Kilburn factory at Saravali and Phase 2 expansion of M.E. Energy at Pune are both expected to be completed by end of Q2... We have already announced certain capex program, which is under implementation. We believe this will be completed by September, October of this year... It remains the same what we've been guiding for in the last 2, 3 calls, which is around 40 crores odd.
Debt Debt disclosed

So, working capital, if you see our interest cost has remained more or less stable. So, our absolute borrowing has actually been stable.
Liquidity Liquidity disclosed Negative cash flow from operations on standalone basis due to increased trade receivables, but positive on consolidated basis. Expected to normalize with collections from June.

our cash flow negative went from INR9 crores to INR17 crores... But on a consol basis, you will see we have a positive cash flow from operations.

Guidance & targets

Revenue

Top Line Growth Revenue · FY27 · High confidence 20-25%

We have set a growth target of 20% to 25% on top line over last year, which would result in a revenue of around INR750 crores to INR800 crores.

— Ranjit Lala
Total Revenue Revenue · FY27 · High confidence INR750-800 crores

— Ranjit Lala
Total Revenue Revenue · FY28 · High confidence INR1,000 crores

our aim is to reach INR1,000 crores by FY28.

— Amritanshu Khaitan

Profitability

EBITDA Margins Profitability · FY27 · High confidence 20% plus

We hope to continue EBITDA margins of 20% plus.

— Ranjit Lala

Order Intake

Order Intake Order Intake · FY27 · High confidence INR800-1,000 crores

And for the coming year, for the current financial year, we are targeting an order intake of around INR800 crores to INR1,000 crores at group level.

— Ranjit Lala

Capex

Expansion Completion Capex · End of Q2 FY27 · High confidence Completed

Furthermore, the expansion of the Kilburn factory at Saravali and Phase 2 expansion of M.E. Energy at Pune are both expected to be completed by end of Q2.

— Ranjit Lala

Exports

Share of Revenue from Exports Exports · Future · Medium confidence 30-40%

We believe exports will play a critical role going into the future. And we think 30% to 40% of our revenue can come from exports.

— Amritanshu Khaitan

What to watch in Q1 FY27

Completion of Saravali and M.E. Energy Phase 2 expansion.

End of Q2 FY27

Current Under implementation

Target Completed

Why it matters

Essential for increasing manufacturing capacity to support future growth targets.

Furthermore, the expansion of the Kilburn factory at Saravali and Phase 2 expansion of M.E. Energy at Pune are both expected to be completed by end of Q2.

Risks & concerns

Geopolitical challenges impacting order intake and logistics.
medium

Geopolitical issues, specifically the West Asia crisis, have delayed order finalization and impacted logistics for dispatches, shifting some major orders by a quarter.

Management acknowledged
Increased trade receivables and negative standalone cash flow from operations.
medium

Trade receivables increased by INR100 crores, leading to negative standalone cash flow, attributed to high Q4 dispatches, but expected to normalize with collections from June.

Analyst acknowledged
Material cost inflation.
low

Material costs, such as steel prices, have been increasing, but the company manages this by booking materials immediately upon order to protect overall EBITDA margins.

Analyst acknowledged

Q&A highlights

7 direct

Negative cash flow from operations and increase in working capital days. Direct

See, this cash flow -- the negative cash flow is a result of our increase in our debtor's level. because in the last quarter, we have dispatched nearly INR130 crores of actual dispatches have happened against only INR50 crores, INR60 crores in the previous year. So, this particular -- this debtor realizations will start flowing in from June. So, this will definitely bring down the -- reduce the debtors and increase our cash flow.

Addresses a key financial concern regarding cash flow and provides a clear explanation and timeline for expected improvement.

Asked by Uzair Lari

Operating leverage not playing out despite revenue growth and potential for higher margins. Direct

So operating leverage and economies of scale has already played out. The company, if you see in the last 3, 4 years, has grown from a INR100 crores, INR200 crores revenue company now to INR600 crores. Now that leverage is already playing out and you see our employee cost as a share of total revenue coming down... we are stable at 25%-odd EBITDA margin. It's not that from 25%, we can jump to 30% or 35%.

Clarifies management's perspective on operating leverage, stating it has already been realized and current margins are sustainable, managing expectations for further significant margin expansion.

Asked by Andrey Purushottam

Impact of West Asian crisis on dispatches and order delays for subsidiaries. Direct

A lot of our equipments were ready for dispatch, which could not be dispatched again due to this problem which has happened globally. That impacted our revenue a bit in Q4 for the subsidiary... Just to add to the crisis had an impact in terms of logistics mainly, where a bunch of our orders, which are slated for the U.S. where first, starting with the gas availability crisis, it slowed our ability to produce the required products... international shipping routes are now quite blocked and it takes a long -- much longer time to arrange shipping from the Mumbai Seaport to other parts of the world.

Explains specific operational challenges and revenue impact in Q4 due to geopolitical events, particularly affecting Monga Strayfield's dispatches.

Asked by Andrey Purushottam

Clarification on growth guidance (20-25% vs 25-30%) and warrant conversion dilution. Direct

So Sangeeta, we have always maintained a 20% to 25% growth strategy going forward for the next 2 years. And with that, our aim is to reach INR1,000 crores by FY28. We will stick to that guidance. We have not changed that guidance in the current quarter, firstly... I think it's a typo error by the IR team who's made it. Our guidance is 20% to 25%... all warrant conversions have happened. So there's no further dilution expected.

Reaffirms the consistent growth guidance and confirms no further equity dilution from warrant conversions, addressing investor concerns about future dilution.

Asked by Sangeeta Purushottam

Execution timeline for nuclear orders and sufficiency of current order book for growth. Direct

We have 2 orders which are related to that vertical. And typically, these orders move quite slow. That's a fact. So currently, I expect then that it would take another year plus for the complete execution.

Provides a realistic, long-term timeline for nuclear projects, indicating their slow-moving nature.

Asked by Bhavya Nahar

Reasons for gross margin decline in Q4 and sustainability of 22-23% EBITDA margins. Direct

As regards gross margin is definitely, as Mr. Amritanshu earlier said, it depends on product mix, also the type of orders we are executing. Now this quarter, the orders which were executing had a higher component of subcontract charges, outside subcontract was involved. So that is the reason... But for a full year perspective, 22 to 23 margins is something that is sustainable for us, right? ... No, Sangeeta, again, we are not guiding for 20%. We are saying 20% plus. We have also mentioned we are looking at maintaining margins of 22%, 23% in all our commentary.

Explains Q4 gross margin fluctuations due to product mix and subcontracting, while reaffirming the sustainability of 22-23% EBITDA margins for the full year.

Asked by Naitik Mohata

Quantification of delayed orders and reasons for working capital increase. Partial

We have not missed orders. We have just mentioned that certain orders getting finalized have got shifted into Q1 of this year and Q2. We expect things to get finalized in the next 2, 3 months... So, working capital, if you see our interest cost has remained more or less stable. So, our absolute borrowing has actually been stable. There have been dispatches which have happened, as we've mentioned in the last -- in this quarter. The money will be realized from the customers in the next 3, 4 months. So, we believe that the working capital cycle will again normalize as collections come in.

Clarifies that orders were delayed, not missed, and provides a timeline for their finalization. Also explains the temporary nature of working capital increase due to Q4 dispatches and expected collections.

Asked by Rabindra Nayak

Average ticket size of orders for the FY27 order inflow target. Direct

So, it can -- I will exclude the tea dryers, which are typically in the range of 40 lakhs to 50 lakhs. I'll exclude them. But anything between 2 crores to 5 crores for the smaller machines, we have some inquiries for around 40 crores odd and even a project of 100 crores plus. So that's the kind of range. And in ME energy, we are even quoting for jobs which are over 300 crores.

Provides valuable insight into the typical project sizes and ranges, particularly highlighting large projects in M.E. Energy, which informs revenue potential.

Asked by Abhijit Mitra

3 min read 6 chapters

Detailed narrative

Robust FY26 Performance and Ambitious FY27 Targets

Kilburn Engineering concluded FY26 with a strong consolidated top line of INR629 crores and an impressive EBITDA margin of 25.13%. For Q4 FY26, consolidated revenue was INR189 crores with a 22.95% EBITDA margin. Looking ahead to FY27, the company has set an ambitious revenue growth target of 20-25% over the previous year, aiming for total revenues between INR750-800 crores. Management expressed confidence in maintaining EBITDA margins above 20%, with a specific focus on the 22-23% range, and reiterated its long-term goal of achieving INR1,000 crores in revenue by FY28.

Strong Order Pipeline Despite Geopolitical Headwinds

The company reported a consolidated order backlog of INR467 crores at the end of Q4 FY26, supported by a robust inquiry pipeline exceeding INR4,000 crores across a diversified range of sectors including fertilizer, nuclear, petrochemicals, and steel. For the current financial year, Kilburn is targeting an order intake of INR800-1,000 crores at the group level. However, geopolitical challenges, particularly the West Asia crisis, have caused delays in order finalization, with some major orders expected to close in Q4 FY26 now pushed to the next 2-3 months.

Working Capital and Cash Flow Management

Kilburn Engineering experienced an increase in trade receivables by INR100 crores on a standalone basis in FY26, leading to a negative cash flow from operations of INR17 crores, up from INR9 crores. This was primarily due to significant dispatches of INR130 crores in Q4 FY26. Management anticipates that these realizations will begin flowing in from June, which is expected to reduce debtors and improve cash flow, thereby normalizing the working capital cycle within the next 3-4 months. Consolidated cash flow from operations, however, remained positive.

Strategic Capacity Expansion Underway

To support its ambitious growth plans, Kilburn Engineering is actively expanding its manufacturing capabilities. The expansion of the Kilburn factory at Saravali and Phase 2 expansion of M.E. Energy at Pune are both projected to be completed by the end of Q2 FY27. An overall capex program, estimated at approximately INR40 crores for the current fiscal year, is currently under implementation and is expected to conclude by September or October. These investments are critical to ensure adequate capacity for the targeted INR1,000 crore revenue by FY28.

EBITDA Margin Stability and Cost Control

The company is committed to maintaining its EBITDA margins at 20% plus, with a stated target range of 22-23%. While Q4 FY26 gross margins saw some pressure due to a higher component of subcontracting charges for specific orders, management emphasized that its policy of booking material immediately upon order helps mitigate the impact of raw material price volatility. Furthermore, it was clarified that approximately 80% of the company's 'other income' is operational in nature, contributing directly to the overall EBITDA.

Diversified Sector Focus and Export Ambitions

Kilburn Engineering continues to serve a diversified range of industries, including fertilizer, nuclear, petrochemicals, steel, and food processing, with no single sector dominating its pipeline. The company also highlighted its growing focus on exports, projecting that 30-40% of its future revenue could come from international markets. This diversification, coupled with a strong inquiry pipeline, positions the company for sustained growth despite specific regional challenges.

This is an AI-generated summary of a publicly available earnings call transcript.

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