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    Kirloskar Brothers Q1 FY27 earnings call

    KIRLOSBROS
    Capital Goods·3 Aug 2026
    Management Summary

    Kirloskar Brothers Limited delivered a healthy Q1 FY27 with strong revenue and order intake growth across its standalone and international segments. While consolidated margins saw some moderation due to product mix and execution delays in overseas subsidiaries, management is optimistic about future improvements driven by a robust order pipeline, strategic focus on high-growth areas like data centers and nuclear power, and ongoing operational efficiencies. The company aims for double-digit revenue growth in FY27 for both standalone and consolidated businesses.

    Highlights

    5

    • Consolidated revenue grew 13% YoY to Rs.11,049 million, reflecting strong market positioning and execution capabilities.

    • Standalone EBITDA grew 16% YoY to Rs.920 million, with PAT increasing 15% YoY to Rs.540 million.

    • Consolidated order intake increased 4% YoY to Rs.13,954 million, providing continued visibility for future growth.

    • International revenue showed robust 19% YoY growth, driven by strong execution in SPP USA and Kirloskar Brothers Thailand.

    • US operations, particularly in data centers and infrastructure projects, grew over 20% QoQ, with a potential multinational framework contract in the pipeline.

    Concerns

    3

    • Consolidated EBITDA margin moderated to 11.8% (from 13% in Q4 FY26), primarily due to a lower contribution from the high-margin services business in SPP UK.

    • Inventory buildup of Rs.82 crores and delays in dispatches were noted due to foundry modernization and partially completed orders.

    • Rodelta (Dutch entity) experienced delayed execution, contributing to international business challenges.

    Key financials

    Single quarter

    07 metrics
    1. 01Consolidated Revenue11,049 Mn+13%YoY
    2. 02Consolidated EBITDA1,306 Mn+2%YoY
    3. 03Consolidated EBITDA Margin11.8%
    4. 04Standalone Revenue6,738 Mn+9%YoY
    5. 05Standalone EBITDA920 Mn+16%YoY

    Order Book

    high confidence

    Total Value

    ₹ 25,577 million

    as of 2026-06-30

    quantified
    4.0% YoY

    Inflow this qtr

    ₹ 13,954 million

    Execution

    Almost two-third of the domestic order board is expected to be executed this year.

    Composition

    Mix3 products
    • Petrol Pump Order (total booking as of Q1 end)₹ 217 crores66.4%
    • Nuclear Primary Circuit Pumps (Q1 orders)₹ 70 crores21.4%
    • Nuclear Secondary Circuit Pumps (Q1 orders)₹ 40 crores12.2%

    Share of order book by product (derived from disclosed amounts)

    Cancellations / Deferrals

    • deferred:Some orders were half completed and half not, leading to inability to ship out the whole order.
    • deferred:One large domestic package for JV Ebara was not dispatched because the customer did not want it at that point.
    • deferred:International orders for JV Ebara were hampered due to inability to ship them.

    "The company maintains a healthy order book with strong visibility, despite some delays in execution and dispatches during the quarter, which are expected to resolve soon."

    Source:
    Prepared remarks

    Capital allocation

    1
    medium confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Guidance & targets

    7
    CategoryTargetPriority
    Profitability
    SPP UK/Rodelta Services Business Contribution
    kicking in
    		Medium
    Profitability
    SPP UK/Rodelta Profitability
    better than previous year numbers
    		Medium
    Profitability
    KPML Margin
    improve
    		Medium
    Order Book
    Domestic Order Board Execution
    almost two-third
    		High
    Order Book
    Nuclear Primary Circuit Development Order
    order can be placed
    		High
    Operations
    Foundry Execution Speed
    much faster
    		Medium
    Market Share
    IoT Adoption
    larger numbers
    		Medium

    What to watch in Q2 FY27

    5

    Resolution of inventory buildup and dispatch delays

    Q2 FY27
    CurrentInventory buildup of Rs.82 crores, orders half-completed
    TargetSignificant improvements in dispatches

    Why it matters

    Directly impacts revenue recognition and working capital efficiency, crucial for achieving full-year growth targets.

    But this month itself, we've seen huge improvements, which we believe will be reflected in the current quarter.

    Risks & concerns

    4
    RiskSeverity

    Inventory buildup and delayed dispatches

    Inventory increased by Rs.82 crores due to foundry modernization and partially completed orders, leading to delayed dispatches. — Analyst acknowledged

    medium

    International business margin pressure

    Consolidated EBITDA margin moderated due to lower contribution from high-margin services in SPP UK, impacted by high energy prices in Europe and delayed execution in Rodelta. — Analyst acknowledged

    medium

    Foundry modernization impact on dispatches

    Foundry modernization temporarily affected dispatches, but the exercise is complete, and improvements are expected in the current quarter. — Management acknowledged

    low

    Metallurgical challenges for nuclear pumps

    Initial metallurgical hiccups for nuclear pumps were resolved by importing components, ensuring no hindrance for civilian nuclear power plant projects. — Management acknowledged

    low

    Q&A highlights

    8

    “Inventory has gone up as we had explained in the previous quarter, we were improving our foundries. And that exercise is complete. But what has happened was some of the orders were half completed and half not. And that is why we couldn't ship out the whole order. But this month itself, we've seen huge improvements, which we believe will be reflected in the current quarter.”

    Addresses the reason for inventory increase and provides a timeline for resolution, indicating improved revenue recognition in the next quarter.

    asked by Manish Goyal

    2 min read6 chapters

    Detailed Narrative

    01

    Q1 FY27 Consolidated and Standalone Performance

    Kirloskar Brothers Limited reported a consolidated revenue of Rs.11,049 million for Q1 FY27, marking a healthy 13% year-on-year growth. Consolidated EBITDA stood at Rs.1,306 million, a 2% YoY increase, with an EBITDA margin of 11.8%. The standalone domestic business also performed well, with revenue growing 9% YoY to Rs.6,738 million. Standalone EBITDA increased 16% to Rs.920 million, and Profit After Tax (PAT) rose 15% to Rs.540 million, demonstrating strong domestic operational performance.

    02

    Order Inflow and Pipeline Visibility

    The company secured a consolidated order intake of Rs.13,954 million, representing a 4% year-on-year growth, which provides strong visibility for future revenues. As of June 2026, the domestic pending order book amounted to Rs.25,577 million, excluding small pump orders, while the overseas pending order book stood at Rs.15,045 million. Management expects to execute almost two-thirds of the domestic order board within the current fiscal year, indicating a healthy conversion rate.

    03

    International Business Challenges and Recovery Outlook

    International revenue grew significantly by 19% year-on-year in Q1 FY27. However, the international EBITDA margin was 5.1%, contributing to the moderation of the consolidated EBITDA margin to 11.8%. This was primarily attributed to a lower contribution from the high-margin services business in SPP UK, impacted by high energy prices in Europe, and delayed execution in Rodelta. Management anticipates the services business to rebound in the third quarter for their international entities (Q2 for KBL), leading to improved blended margins.

    04

    Strategic Focus on US Data Center Market

    US operations demonstrated robust growth, increasing over 20% quarter-on-quarter, driven by demand from data centers and US infrastructure projects. Kirloskar Brothers is actively pursuing a multinational framework contract with a major US data center operator. The company offers specialized modular pump systems for hyperscale data centers, with typical package values ranging from USD7.5 million to USD10 million, targeting the approximately 4,000 operating and 2,000 planned data centers in the US.

    05

    Operational Efficiencies and Margin Drivers

    The company experienced an inventory buildup of Rs.82 crores and dispatch delays due to ongoing foundry modernization. However, management confirmed that the foundry exercise is complete, and significant improvements in dispatches are expected in the current quarter. Standalone gross margins improved due to a favorable product mix and a 10% price hike implemented since January, which is deemed sufficient to cover raw material costs. The merger of TKSL into KPML temporarily impacted KPML's margins, but improvement is expected going forward⏳.

    06

    Investments in Digitalization and IoT

    Other expenses increased by 21% year-on-year, primarily due to strategic investments in digitalization and advertisement. Kirloskar Brothers is bullish on its IoT offerings, having developed two versions of IoT devices to reduce customer adoption costs. The company is currently the sole supplier for IoT solutions in India for government and customer requirements, and expects this technology to significantly enhance after-market services by enabling remote monitoring of pump performance and ensuring uptime.

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