KECL - Kirl. Electric

📊 NSE: KECL 🏢 Electric Equipment 📅 Last Updated: 12/14/2025 8:55

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for FY24 reached INR 557.35 Cr, representing a 17.7% growth from INR 473.55 Cr in FY23. By FY25, segment performance showed Power Generation/Distribution at INR 294.94 Cr, Rotating Machines at INR 235.80 Cr, and Other segments at INR 15.53 Cr.

Geographic Revenue Split

The company maintains a diversified regional presence across India with overseas customers; however, specific percentage splits by region are not disclosed in available documents.

Profitability Margins

Operating Profit Margin significantly declined from 1.30% in FY24 to 0.10% in FY25. Net Profit Margin showed a slight improvement from 2.68% in FY24 to 3.08% in FY25, primarily aided by exceptional items and asset monetization.

EBITDA Margin

PBILDT margin stood at 6.21% in FY24 (INR 34.62 Cr on INR 557.35 Cr revenue). Standalone PBILDT for the period ending December 2024 was INR 29.33 Cr.

Capital Expenditure

The company has focused on debt reduction rather than heavy CAPEX, utilizing INR 98.20 Cr from the Hubballi land sale and INR 2.98 Cr from Hyderabad asset sales to clear term loan dues.

Credit Rating & Borrowing

Long-term bank facilities of INR 38.00 Cr are rated CARE B+; Stable, and short-term facilities of INR 77.63 Cr are rated CARE A4. Interest coverage ratio was 1.41x in FY24 but dropped to 0.07x on a standalone basis in FY25.

⚙️ Operational Drivers

Raw Materials

Key raw materials include copper, iron, and steel, which collectively account for more than 70% of the total cost of production.

Capacity Expansion

The company operates 6 manufacturing units. Specific capacity in units or MT is not disclosed, but the company is focusing on increasing capacity utilization which was previously hindered by working capital shortages.

Raw Material Costs

Raw material costs exceed 70% of revenue. The high volatility in global copper and steel prices directly impacts the cost of manufacturing motors and transformers, requiring frequent pricing adjustments.

Manufacturing Efficiency

The company is working to improve capacity utilization by addressing historical working capital shortages caused by the INR 224.47 Cr impairment of its German subsidiary, LDW.

📈 Strategic Growth

Growth Strategy

Growth is targeted through the monetization of non-core assets to improve the financial risk profile and reduce debt. The company is focusing on high-growth sectors like Defense, Railways, and Electric Vehicles, where it supplies specialized motors and customized electrical equipment.

Products & Services

AC motors, DC motors, transformers, switchgear, alternators, generators, diesel generator sets, and electronics including motors for electric vehicles.

Brand Portfolio

Kirloskar Electric (KECL).

New Products/Services

The company is a leading Indian manufacturer of motors specifically designed for Electric Vehicles (EVs).

Market Expansion

Expansion is focused on domestic government initiatives for manufacturing and increasing repeat orders from established PSU and EPC clients.

Market Share & Ranking

Established as one of the major players in the domestic electric equipment industry with over 70 years of operations.

Strategic Alliances

Maintains an associate relationship with Kirloskar (Malaysia) Sdn. Bhd. and various wholly-owned subsidiaries including Luxquisite Parkland and KELBUZZ Trading.

🌍 External Factors

Industry Trends

The electrical equipment industry is evolving with a shift toward domestic manufacturing (Make in India) and Electric Vehicle adoption. KECL is positioning itself by supplying EV motors and specialized equipment for Defense.

Competitive Landscape

Operates in a highly competitive market with persistent pressure from both domestic and international electrical equipment manufacturers.

Competitive Moat

The company's moat is built on a 70-year brand legacy, extensive promoter experience (Vijay Kirloskar has 30+ years), and deep-rooted relationships with PSUs which provide stable repeat orders.

Macro Economic Sensitivity

Highly sensitive to industrial growth and government infrastructure spending in sectors like Railways and Power Generation.

Consumer Behavior

Shift toward green energy and electric mobility is driving demand for KECL's EV motor segment.

Geopolitical Risks

Exposure to global commodity price fluctuations for copper and steel due to global linkages.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. Manufacturing must adhere to domestic electrical safety and quality standards.

Taxation Policy Impact

The company follows IND-AS accounting standards. Tax expense for FY25 was INR 0.18 Cr on a standalone basis.

Legal Contingencies

The company has a pending Special Leave Petition in the Supreme Court regarding a resale tax penalty demand of INR 5.27 Cr (527 lakhs).

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the ability to maintain consistent profitability amidst volatile raw material costs and the successful monetization of remaining non-core assets to stabilize the balance sheet.