Kirl.Pneumatic

Kirloskar Pneumatic reported its strongest financial year to date, achieving the highest order booking of over INR 2,000 crores. The company recorded its highest total income of INR 1,786 crores and highest PBT of INR 356 crores for FY26. The EBITDA margin improved significantly to 21.7% in FY26 from 19% in FY25, with the Compression segment showing an operating profit of 24.9%. This robust performance was attributed to in-house capabilities, strategic market approaches, and cost-saving efforts.

The company made significant strides in innovation, filing 57 new IPs in FY26, bringing the total to over 128. Several new products were developed and launched, including the Zephyros air conditioning package, Hydrino oil-free air compressor, and Tyche semi-hermetic compressors. Zephyros, utilizing a green refrigerant, is set for commercialization in Q1 FY27, targeting smaller machine shops and banquet halls. The Hydrino oil-free compressor, domestically produced for food and pharmaceutical applications, has already secured initial orders.

As of April 1, 2026, the unexecuted order book stood at INR 1,863 crores, marking a 15% increase from INR 1,624 crores a year prior. Of this, INR 1,363 crores is expected to be executed in FY27, with INR 500 crores extending beyond. The company is strategically shifting its focus towards the Equipment business, which features shorter execution cycles of 4 to 12 weeks, aiming to reduce lumpiness and improve predictability compared to larger, longer-cycle packages.

Kirloskar Pneumatic has committed INR 320 crores under the PLI scheme for new product development and backward integration initiatives. Approximately INR 60 crores has already been incurred, with the remaining investment planned over the next two years. This capex supports the in-house manufacturing of critical components like motors, heat exchangers, and sheet metal for new products such as Zephyros, enhancing cost efficiency and control over the supply chain.

The Refrigeration division contributed 40-45% of the total business, achieving record high volumes for its KC/KCX compressor range. The Air Compressor division (18-20% of business) saw strong market share gains for Tezcatlipoca centrifugal compressors and record highs for gas reciprocating compressors, though screw compressors were a laggard. The Process Gas Systems division (35-40% of business) performed well, expanding its O&M business to manage over 1,000 CNG stations across India, with a positive outlook driven by domestic exploration and alternative fuels.

The geopolitical situation in the Middle East has created near-term pressure on export orders, making dispatch and new bookings challenging. In response, the company has diversified its focus to regions like Southeast Asia and North Africa. Management believes that while there are current difficulties, the long-term implications of geopolitical unrest could increase demand for gas packages. The company is also well-positioned to capitalize on opportunities in alternative fuels such as biogas and hydrogen.

The company maintained its debt-free status, reporting a net cash position of INR 460 crores as of April 1, 2026. For FY26, Kirloskar Pneumatic declared its highest-ever dividend of INR 12 per share, representing 600% on a face value of INR 2. This includes an interim dividend of INR 3.50 and a final dividend of INR 8.50 per share. The Earnings Per Share (EPS) for FY26 grew by 22% to INR 39.80, reflecting strong profitability.