Kirloskar Brothers surges 15%

Kirloskar Brothers is among the top gainers on the BSE, surging 15.09% to Rs. 1,844.70, a gain of Rs. 241.85 over its previous close of Rs. 1,602.85, as per the supplied market snapshot. The stock opened at Rs. 1,597.45 and touched an intraday high of Rs. 1,867.05. Market capitalisation stood at Rs. 14,614 crore. The rally reflects renewed investor interest following strong Q2 FY27 results and a substantial increase in order inflows.

Trigger

• Consolidated Q2 FY27 revenue increased 24% YoY to Rs. 1,276.7 crore.
• EBITDA rose 16% YoY to Rs. 143.2 crore, with EBITDA margin at 11.2%.
• Consolidated PAT increased 4% YoY to Rs. 74.7 crore.
• Order inflows jumped 68% YoY to Rs. 2,047.2 crore.
• Consolidated pending order book grew 30% YoY to Rs. 4,627.7 crore.
• Standalone revenue increased 23% YoY to Rs. 799.1 crore, while standalone PAT surged 45% to Rs. 54.4 crore.
• Management expects double-digit standalone revenue growth in FY27 and improving margins in H2.

The biggest positive is the sharp acceleration in order inflows, which provides revenue visibility for the coming quarters. Domestic orders received during Q2 stood at Rs. 1,401.7 crore, while overseas orders contributed Rs. 645.5 crore.

Demand has remained broad-based, with water and irrigation sales growing 38% YoY, power 64%, marine and defence 57%, and oil and gas reporting a sharp increase from a lower base. The company also secured pump orders for nuclear projects, water infrastructure and the oil and gas sector.

However, consolidated profitability has not kept pace with revenue growth. EBITDA margin declined from 12% to 11.2%, while gross margin contracted from 53.6% to 49.2%, reflecting input-cost pressures and weaker overseas margins. Consolidated PAT growth was restricted to just 4% despite the 24% revenue increase. This remains an important distinction between strong business momentum and actual earnings conversion.

At a consolidated PE of 38.50 times and price-to-book of 9.68 times, based on the supplied BSE figures, expectations of sustained growth are already meaningful. The rising order book is encouraging, but improved margins, timely execution and stronger cash flows will be essential to support the valuation after the sharp rally.