Kirloskar Brothers reported a 24% YoY surge in consolidated revenue to Rs 1,277 crore for Q2FY27. While the robust order book of Rs 4,628 crore drives optimism, net profit growth remained modest at 4% due to margin pressure from inflation and high employee costs. Analysts maintain a Buy rating with a target price of Rs 2,100, focusing on the company's strong execution in the power and water infrastructure sectors.
Kirloskar Brothers Q2 Revenue Jumps 24% to Rs 1,277 Crore
Order book hits Rs 4,628 crore, reflecting 30% YoY growth.
Reader Takeaway: Strong order inflows drive double-digit revenue growth, though raw material inflation and international project delays compress margins.
What just happened
Kirloskar Brothers (KBL) delivered a strong top-line performance for Q2FY27, reporting consolidated revenue of Rs 1,277 crore, a 24% increase compared to the previous year. The company outperformed analyst revenue estimates by 9%. Despite this, net profit growth was limited to 4% YoY, reaching Rs 74 crore. EBITDA margins softened to 9.7%, marking an 81 basis point contraction from the year-ago period due to higher employee costs and input inflation.
Why this matters
The company’s order book is the standout metric, swelling to Rs 4,628 crore, up 30% YoY. Unlike reliance on isolated mega-projects, the current order intake is broad-based, spanning irrigation, power, oil and gas, and marine defense. This diversification provides a stable revenue visibility for the coming quarters. Management remains confident in achieving double-digit standalone revenue growth for FY27.
The backstory
KBL has been managing 8-12 month manufacturing cycles for custom capital equipment. Significant inventory is currently tied up in Work-In-Progress (WIP), which is expected to normalize as these orders are dispatched through Q3 and Q4FY27. Additionally, the international business—specifically UK water utility service contracts—faced temporary delays in revenue recognition due to preliminary site evaluations, with growth now expected to accelerate in H2FY27.
Risks to watch
Margin volatility remains a primary concern. Raw material costs for copper, gunmetal, and steel continue to pressure the bottom line, and there is a time lag in passing these costs on to customers. Investors should watch the pace of margin recovery and the conversion of the international order pipeline.
What to track next
Watch for the realization of the large WIP inventory in the second half of the fiscal year. Success in the UK AMP-8 water infrastructure program and sustained demand from data centers and nuclear power segments will be key performance drivers to monitor in the next filing.