Target: ₹2,100
CMP: ₹1,747.60
Kirloskar Brothers Ltd (KBL) has posted a 19 per cent y-o-y revenue growth during the quarter, with a 23 per cent increase in the overseas business. Growth in the overseas segment was driven by strong performance in SPP UK and Dutch subsidiaries, while the company has observed traction in SPP US post-elections.
KBL also maintains a strong order book of ₹3,094 crore (vs ₹3,057 crore in Q2FY25), indicating robust revenue visibility in the future.
KBL has been strategically focusing on increasing the share of value-added products while significantly reducing its exposure to low-margin and lumpy EPC orders. Additionally, it has been investing in technological upgrades to enhance operational efficiencies and increase the value of its offerings. These efforts are evidently translating into the company’s strong performance, as it has managed to expand margins significantly over the last two quarters. The management expressed confidence in sustaining the margin improvement going forward.
With sustained demand from key end markets and a robust order book, KBL remains on track to achieve double digit revenue growth in FY25. The current order book provides strong revenue visibility, and order intake is expected to remain strong going forward. Additionally, the focus on cost optimisation and an improved product mix should support continued margin expansion.