KIRLOSBROS Q2 FY26 earnings call.
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Revenue
₹1,028 Cr
verified against source
Revenue YoY
—
reported change
EBITDA
₹124 Cr
latest reported figure
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Actual signal trajectory
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What the record says.
Kirloskar Brothers reported Q2 FY26 consolidated revenue of 1,028 crores, flat YoY, with H1 revenue declining 3% to 2,007 crores due to seasonal headwinds and extended monsoons. EBITDA margin stood at 12% (124 crores EBITDA), moderated by product mix changes and ~20 crores FX mark-to-market losses from GBP/USD volatility and dollar deposits in KBILB. Standalone order book (excluding small pumps) grew 13% YoY to 2,127 crores, providing H2 visibility. International operations shined with US+21%, Thailand+158%, South Africa+27% growth (constant currency), offsetting UK softness from energy-intensive sector de-industrialization. The Jal Jeevan Mission funding bottleneck (affecting ~5% of standalone revenues) has led to dispatch holds—receivables remain zero due to strict commercial policies. Management remains confident of achieving double-digit revenue growth in FY26, citing the typical 60-62% H2 revenue seasonality and robust order pipeline. Key risks: UK service contract idling, FX translation losses, and state government fund flow delays for government projects.
Colored figures show movement against the previous available record.
Guidance to track
- Management expressed high confidence in meeting double-digit revenue growth targets for full year FY26, based on H2 seasonality (60-62% of revenue historically in H2), robust order book position, and improving operational execution.
- Company historically delivers 35-38% in H1 and 60-62% in H2; management expects H2 execution on order book and Jal Jeevan dispatch normalization to drive full-year performance in line with aspirations.
- Management expects UK subsidiary (Syntraflow) margins to return to double-digit levels in medium term as service revenue mix improves and new water/power plant service contracts ramp up, offsetting current chemical/steel sector softness.
- KBL has been declared L1 (lowest bidder) for retail petroleum pump sets at IOC; order received and execution timeline is approximately 9 months. Domestic market focus initially before exploring exports.
Risks flagged
- Center released JJM funds but states must contribute 10-50% share, which remains unreleased. KBL has withheld dispatches (receivables exposure is zero per commercial policy) but this creates inventory holding and H2 revenue timing uncertainty. Management declined to name specific states.
- Analyst raised concern about UK Syntraflow margins recovery to double-digit. Management acknowledged that ~120 service contracts in north England (chemical/steel/petrochemical) are idling due to high power costs (£280/MWh vs Germany £120, Sweden £52), and new contracts take 2-3 months to ramp up. AMP8 water sector orders have started trickling but not yet meaningfully.
- ~20 crores FX loss (1.8M GBP) passed through P&L in Q2 due to GBP/USD depreciation and mark-to-market on hedged positions. Additional ~0.5M USD translation loss on dollar deposits held in KBILB (euro-denominated accounts) remains notional but converts to real loss if funds are deployed in non-dollar currencies.
- Analyst noted Dutch entity revenue dropped sharply from 24 crores to 8 crores QoQ with losses reported. Management attributed to lumpiness and election-related delays, with order book stronger YoY but execution concentrated in Q3 (their year-end). Recovery uncertain in near term.
Key quotes
- We maintain its strict commercial policies. While we were quite hopeful when the center released funds for Jal Jeevan Mission, dispatches and further manufacturing have been held due to non-release of funding at state level.
- Our focus has been to offset that by new contracts that we have received in the water and power plants segment... in the UK especially we have found two issues. One is some supply chain issues which continue to be there on the large project side and the other side we have issues in terms of the number of available service contracts.
- Looking at the order board looking at the way the situation is with customers as well as some of the changes that we are making in the plant, I'm very confident of meeting these targets.
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