Kirloskar Brothers (500241) Q2 26/27 earnings summary

Executive summary

• Q2FY27 consolidated revenue rose 24% YoY to Rs. 12,767 Mn; H1 revenue grew 19% to Rs. 23,816 Mn.

• Q2 consolidated order intake increased 68% YoY to Rs. 20,472 Mn; pending orderbook reached Rs. 46,277 Mn.

• Q2 consolidated EBITDA grew 16% to Rs. 1,432 Mn; reported PAT rose 4% to Rs. 747 Mn.

Financial highlights

• Q2 gross margin was 49.2% versus 53.6% YoY; EBITDA margin was 11.2% versus 12.0%. H1 gross margin was 50.8% versus 53.8%, and EBITDA margin was 11.5% versus 12.5%.

• Q2 PBT rose 9% YoY to Rs. 1,045 Mn; H1 PBT increased 3% to Rs. 1,996 Mn.

• Standalone Q2 revenue was Rs. 7,991 Mn, EBITDA Rs. 937 Mn and PAT Rs. 544 Mn; H1 revenue was Rs. 14,729 Mn and PAT Rs. 1,084 Mn.

• H1 standalone operating cash flow was negative Rs. 1,005 Mn, versus positive Rs. 277 Mn a year earlier, reflecting working-capital outflows and Rs. 478 Mn income tax paid.

Outlook and guidance

• Standalone businesses are expected to deliver double-digit revenue growth in FY27 over FY26.

• Management expects margins to improve in H2; overseas margins should be noticeably better than H1 as service contracts commence, while U.K. recovery may take longer.

• Domestic pending orderbook excluding small pumps was Rs. 29,264 Mn at September 2026, up 29% YoY; overseas pending orderbook was Rs. 17,013 Mn, up 32%.

• Strategy emphasizes value-added products and services, subscription services, international expansion, capacity debottlenecking, cost optimization and product innovation; EPC exposure declined from 10% of revenue in FY20 to 3% in FY26.

• A subscription platform is intended to generate recurring service revenue through monitoring, predictive maintenance, repairs, upgrades and maintenance; existing AMC and framework contracts could migrate to it.