Kirloskar Brothers (500241) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 consolidated revenue was ₹979 crore, a 5% year-on-year decline, mainly due to seasonal and geopolitical factors, with industrial demand remaining strong and order inflows rising 9% to ₹1,336 crore.

• Net profit after tax for Q1 FY26 was ₹68 crore, up from ₹66 crore in Q1 FY25, and the orderbook at Q1 FY26 end stood at ₹3,345 crore, providing strong revenue visibility.

• The company continues its transformation journey, focusing on innovation, digitalization, and sustainability to drive future growth.

• Standalone and consolidated revenues declined sequentially, but net profits improved year-over-year, supported by strong international revenue and exceptional gains from a subsidiary stake sale.

• Board and audit committee reviewed and approved the results, with audit reviews finding no material misstatements or non-compliance.

Financial highlights

• EBITDA for Q1 FY26 was ₹128 crore, up 0.5% year-on-year, with margin improving to 13% from 12.3% last year.

• PAT for Q1 FY26 was ₹68 crore, up 2.9% year-on-year, with PAT margin at 6.9%.

• Standalone revenue was ₹621 crore, down 7% year-on-year, but standalone EBITDA grew 10% to ₹79 crore, with margins expanding to 12.7%.

• Standalone and consolidated EPS for Q1 FY26 were ₹5.93 and ₹8.40, respectively.

• ROCE (annualized) as of Mar-25 was 21.3%, and investments (including cash and equivalents) at Mar-25 were ₹864 crore.

Outlook and guidance

• Management expects a recovery in Q2, viewing Q1 softness as seasonal, and deferred international orders are expected to be executed in upcoming quarters.

• Focus remains on increasing value-added products, subscription services, and leveraging global presence for growth.

• Continued emphasis on cost optimization, debottlenecking, and product innovation to improve margins and profitability.

• Optimism for future growth is supported by a strong order book and continued focus on operational excellence.