💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 12.3% to INR 4,492.2 Cr in FY25. Small and Medium Pump Division (SMPD) achieved 13% growth in FY25. International revenue grew 21% YoY in FY25. However, H1FY26 saw a 2.9% decline to INR 2,006.7 Cr compared to INR 2,066.7 Cr in H1FY25 due to seasonal moderation and deferred orders.

Geographic Revenue Split

International revenue share increased to 35% of total group revenue in FY25, up from 26% in FY24. Key markets include Europe, the U.S., Africa, and Southeast Asia. Domestic revenue accounts for the remaining 65%.

Profitability Margins

Gross margin improved to 53.8% in H1FY26 from 52.3% in H1FY25. Net Profit Margin (PAT) expanded to 9.3% in FY25 from 8.6% in FY24. Standalone Net Profit Margin was 8.66% in FY25 compared to 8.97% in FY24, a 3% decrease.

EBITDA Margin

Consolidated EBITDA margin expanded by 70 bps to 15.2% in FY25 (INR 681 Cr) from 14.5% in FY24. H1FY26 EBITDA margin stood at 12.5% (INR 251 Cr) compared to 13.7% (INR 283 Cr) in H1FY25, reflecting seasonal pressures.

Capital Expenditure

The company plans moderate annual capital expenditure of INR 150-200 Cr over the medium term to support manufacturing efficiency and product development.

Credit Rating & Borrowing

CRISIL reaffirmed 'CRISIL AA/Stable' for long-term and 'CRISIL A1+' for short-term ratings. The company is net debt-free with total debt reducing to INR 133 Cr in FY25 from INR 213 Cr in FY24. Interest coverage ratio improved to 24.99x in FY25 from 20.53x in FY24.

⚙️ Operational Drivers

Raw Materials

Steel, iron, and copper are primary raw materials for pump and valve manufacturing. Specific percentage of total cost for each material is not disclosed in available documents.

Import Sources

Not disclosed in available documents; however, the company operates 11 manufacturing plants globally, suggesting localized sourcing in the US, UK, Netherlands, and South Africa.

Capacity Expansion

Current capacity is not explicitly stated in units; however, the company is expanding its global footprint through 11 manufacturing plants and focusing on 'Buy American' program compliance for US market expansion.

Raw Material Costs

Raw material costs (COGS) were INR 958.5 Cr in H1FY26, representing 47.8% of revenue. The company has improved its ability to pass through raw material price fluctuations to customers, supporting a 13.7% increase in gross profit in FY25.

Manufacturing Efficiency

ROCE improved to 27% in March 2025 from 21.3% in March 2023. The company uses cost-optimization measures and R&D to drive efficiency, with 8 new products earning the India Design Mark.

📈 Strategic Growth

Expected Growth Rate

10-15%

Growth Strategy

Growth will be driven by increasing international revenue share (targeting 35%+), expanding in the US via 'Buy American' compliance, and focusing on high-margin services and spares. The company is also pivoting away from lumpy EPC projects to steady product-based sales in water, power, and irrigation sectors.

Products & Services

Small and medium pumps, industrial pumps, valves, fire protection packages, HVAC packages, and customer service/spares (CSS).

Brand Portfolio

Kirloskar, Kirloskar Brothers Limited (KBL), Kirloskar Ebara Pumps Ltd (KEPL), Rodelta Pumps International.

New Products/Services

8 new products earned the India Design Mark recently; focus is on energy-efficient pumps to replace competitor products in the industrial sector.

Market Expansion

Targeting expansion in Southeast Asia, the US (data centers and HVAC), and South Africa (complying with B-BBEE norms).

Market Share & Ranking

India's largest manufacturer and exporter of pumps with a leadership position in the domestic market.

Strategic Alliances

Joint Venture with Ebara Corporation (Kirloskar Ebara Pumps Ltd - KEPL) for specialized high-end pumps.

🌍 External Factors

Industry Trends

The industry is shifting toward energy-efficient fluid management and digital subscription platforms for recurring revenue. Demand is growing from data centers and fire/HVAC packages in developed markets.

Competitive Landscape

Faces intense competition from the unorganized sector in small pumps and global players in high-end industrial segments.

Competitive Moat

Durable advantages include a century-old brand legacy, a massive distribution network in 100+ countries, and high switching costs for specialized industrial pumps. These are sustainable due to the company's shift toward services and spares which lock in customers.

Macro Economic Sensitivity

Sensitive to cyclicality in end-user industries like power, construction, and irrigation. Revenue is tied to government spending on water resource management.

Consumer Behavior

Industrial customers are increasingly prioritizing energy efficiency and lifecycle costs over initial purchase price, favoring KBL's R&D-led products.

Geopolitical Risks

Trade barriers and local sourcing norms (e.g., 'Buy American', B-BBEE in South Africa) require localized manufacturing presence to mitigate risks.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with 'Buy American' program for US government-funded projects and Broad-Based Black Economic Empowerment (B-BBEE) in South Africa.

Environmental Compliance

High commitment to ESG principles to enhance stakeholder confidence for international operations and access to global capital markets.

Taxation Policy Impact

Direct taxes paid in H1FY26 were INR 74.8 Cr. Effective tax rate is not explicitly stated but follows standard Indian corporate tax norms.

Legal Contingencies

Retention receivables of INR 156 Cr have been outstanding for more than two years in the projects business, which are being monitored for recovery.

⚠️ Risk Analysis

Key Uncertainties

Turnaround of loss-making subsidiaries (TKSL and Rodelta) and recovery of slow-moving retention receivables (INR 156 Cr) are primary uncertainties.

Geographic Concentration Risk

35% of revenue is international; domestic revenue is concentrated in government-led irrigation and power projects.

Third Party Dependencies

Not disclosed as a major risk; the company has high backward integration through subsidiaries and JVs.

Technology Obsolescence Risk

Mitigated by continuous R&D and 8 new product certifications in the last 5 years.

Credit & Counterparty Risk

Working capital intensive due to the projects business; however, the shift to a product-based model (97% of revenue) has improved the working capital cycle.