Skip to content

    Kirl. Brothers

    KIRLOSBROSGood
    Capital Goods·15 May 2025
    Management Summary

    Kirloskar Brothers delivered a robust performance in FY25, marked by 12% revenue growth and an 18% rise in EBITDA, driven by strong momentum in both domestic and international markets. The company maintains a healthy order book of over ₹3,000 crores, providing good visibility. While Q4 saw moderated revenue growth and a slight dip in EBITDA due to customer liquidity issues and material delays, management remains optimistic, focusing on operational efficiencies, new product launches, and expanding its high-margin services business, particularly in overseas markets. Working capital management was a key highlight, with a significant reduction in receivable days.

    Highlights

    8

    • Consolidated Revenue for FY25 reached ₹4,492 crores, a 12% YoY increase.

    • Consolidated EBITDA for FY25 grew 18% YoY to ₹681 crores, with the margin expanding to 15.2%.

    • Consolidated PAT for the full year FY25 stood at ₹419 crores.

    • Q4 FY25 Consolidated Revenue was ₹1,281 crores, up 4.7% YoY.

    • Q4 FY25 Consolidated EBITDA was ₹215 crores with a margin of 16.8%, a slight decline from ₹228 crores YoY.

    • The total pending order book stands strong at ₹3,012 crores (Standalone: ₹1,804 crores, Overseas: ₹1,208 crores).

    • International business registered a significant 21% growth in FY25.

    • Board recommended a final dividend of ₹7 per share, an increase from the previous year.

    What Changed2

    vs Q2 FY26

    Tone shiftMixed → GoodGuidance items3 → 4 (+1)
    Key financials

    Metrics

    8

    Periods

    3

    Headline

    1
    • Consolidated Receivable Days
      102 days

    Q4 FY25

    3
    • Consolidated Revenue
      ₹1,281 Cr
      YoY+4.7%
    • Consolidated EBITDA
      ₹215 Cr
      YoY-5.7%
    • Consolidated PAT
      ₹138 Cr

    FY25

    4
    • Consolidated Revenue
      ₹4,492 Cr
      YoY+12.3%
    • Consolidated EBITDA
      ₹681 Cr
      YoY+17.8%
    • Consolidated EBITDA Margin
      15.2%
    • Consolidated PAT
      ₹419 Cr

    Segment breakdown

    • Standalone Business₹1,804 Cr59.9%
    • International Business₹1,208 Cr40.1%
    Donut· Share of Pending Order Book

    Guidance & targets

    3
    CategoryTargetPriority
    Dividend
    Final Dividend per Share
    ₹7
    		High
    Capex
    Annual Maintenance Capex
    approx. ₹100 crores
    		High
    Margin
    Margin Improvement
    Possibility of improvement
    		Low

    Risks & concerns

    5
    RiskSeverity

    Customer Liquidity Issues

    Management cited customer liquidity issues and delayed payments as a reason for the Q4 slowdown, indicating a potential headwind in the market. — Management acknowledged

    medium

    Project Execution & Order Deferrals

    Delays in receiving free-issue material for large pumps impacted Q4. Management also confirmed some delays in order placements from clients. — Management acknowledged

    medium

    US Tariff Uncertainty

    The impact of US tariffs is unclear due to their inconsistent application. While it could be a net positive, management cannot provide a clear outlook. — Both downplayed

    low

    De-industrialization in Europe

    Management noted a long-term trend of de-industrialization in Europe/UK due to net-zero policies, which could affect key customers over time. — Management acknowledged

    low

    Areas of Evasion(1)

    • Committing to a specific long-term margin target (e.g., 20%+)

    Q&A highlights

    3

    “Sanjay Kirloskar: Yes, there is a possibility. That what said that we are trying to reduce waste, improve operation, because we see a lot of scope for that. Rama Kirloskar: We will try to do our best. I cannot promise any numbers.”

    This question tested the upper limits of profitability. Management acknowledged the potential but prudently avoided committing to a specific high number, indicating a focus on steady, operational-led improvements rather than aggressive targets.

    asked by Akash

    2 min read6 chapters

    Detailed Narrative

    01

    FY25 Financial Performance and Order Book

    Kirloskar Brothers reported a strong FY25, with consolidated revenues growing 12% YoY to ₹4,492 crores and EBITDA increasing 18% to ₹681 crores. This resulted in an improved EBITDA margin of 15.2%. The performance was supported by a 12% growth in order inflows, reaching ₹5,182 crores for the year. The company ended the year with a robust pending order book of ₹3,012 crores, split between standalone operations (₹1,804 crores) and overseas business (₹1,208 crores), providing strong revenue visibility.

    02

    International Business Expansion

    The international business was a key growth driver, registering a 21% increase in revenue in FY25. This growth was led by strong performance in SPP U.K., the Dutch entity, and Kirloskar Brothers Thailand. Management highlighted good traction in the U.S. market, particularly for data centers, fire, and HVAC packages. The overseas pending order book of ₹1,208 crores underscores the sustained momentum in global markets.

    03

    Domestic Market and Small Pumps Segment

    On a standalone basis, the company achieved a 7% YoY revenue growth to ₹2,901 crores. Key domestic growth drivers included the Building & Construction, Industrial, and Power sectors. The Small Pump business also saw a 7% growth, bolstered by the launch of around 200 new energy-efficient products and a focus on market penetration through its distributor network. The company is also targeting rural markets with a new range of economy models.

    04

    Focus on Services and Technology

    Management reiterated its strategic focus on expanding the high-margin services business. While the domestic market for long-term service contracts is still evolving, the international target is to derive 50% of revenue from services. This push is supported by internally developed proprietary software like 'Colligo' and 'Phoenix' for standardizing and scaling repair operations, along with an IoT device for remote monitoring and predictive maintenance.

    05

    Margin Outlook and Operational Efficiency

    The consolidated EBITDA margin for Q4 FY25 stood at 16.8%, a slight dip from the previous year. Management attributed this to customer liquidity challenges and delays in free-issue material, which impacted execution. Looking ahead, the company sees scope for margin expansion through ongoing operational efficiency initiatives, waste reduction, and planned future rejigs of the foundry and factory at its large Kirloskarvadi plant.

    06

    Strong Working Capital Management

    A significant achievement was the improvement in working capital. Consolidated receivable days were reduced from 124 to 102 days. Management emphasized a strict 'cash and carry' policy, stating, "top line is vanity, bottom line is sanity and cash flow is reality." This disciplined approach to collections strengthens the balance sheet and underpins the company's financial health.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.