Kirloskar,
Portions of Kirloskar Siblings (KBL) rose 10% to Rs 421.95 on the BSE in intra-day exchange on Friday. The stock is moving closer to Rs 424, which was its 52-week high on November 25, 2022.
The Kirloskar Group’s flagship company is KBL. As the market chief in liquid administration, KBL gives total liquid administration answers for enormous foundation projects in the areas of water supply, power plants, water system, oil and gas and marine and protection. Pumps, valves, and hydro turbines for the industrial, agricultural, and domestic markets are produced by KBL. KBL is the only pump manufacturer in India and the ninth company worldwide to be accredited by the American Society of Mechanical Engineers (ASME) with EN and NPT certification.
The company introduced its new product, a submersible borewell pump of the KW series designed for HVAC applications and capable of handling sand particles at a low energy consumption, in the October-December quarter (Q3FY23).
KBL’s consolidated profit after tax (PAT) more than doubled to Rs 135.10 crore in the first nine months of the current financial year 2022-23 (9MFY23), thanks to strong operating performance. In 9MFY22, it reported a PAT of Rs 39.7 crore. From Rs 2,103 crore a year earlier, revenue increased by 23.9 percent to Rs 2,606 crore (YoY).
The improved product mix, operating leverage, and revenue recognition of higher value orders all contributed to an increase of 362 basis points, or bps, in the earnings before interest, taxes, depreciation, and amortization (EBITDA) margin to 10.3%. The consolidated order book of the company increased by 21% to Rs 2,845 crore.
In addition to a substantial order book and healthy demand growth, CRISIL Ratings anticipates good operating performance in the subsequent quarters of the current fiscal year, as well as annual revenue growth of 8-10 percent in the medium term. Ebitda margins are expected to rise to 8% to 9% in the medium term thanks to cost-rationalization efforts and the continued improvement in performance of international subsidiaries. A crucial watchdog continues to be sustained improvement in operating profitability.
KBL Group’s expectation of continued improvement in its operating performance while maintaining an adequate financial risk profile over the medium term is reflected in the “Positive” outlook. This is bolstered by the Group’s well-established position in the pump industry, extensive order book with clear revenue visibility, and extensive geographic reach via a robust distribution network. The rating agency stated that, in comparison to moderate annual capital expenditure (capex) of Rs 70-80 crore, annual cash accruals are anticipated to be approximately Rs 200 crore in the medium term. With improved operating performance, debt metrics are anticipated to improve. said in the argument in September.
