Kirloskar Electric Company Limited

Industrials — Specialty Industrial Machinery · NSE

₹118.46+₹0.06 (+0.05%)

DalalBaazaar Score

36 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by short-term liabilities exceed short-term assets, negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:07 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Kirloskar Electric Company Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Kirloskar Electric Company Limited engages in the manufacturing and sale of various electrical equipment in India and internationally. The company operates through Power Generation and Distribution Group, Rotating Machines Group, and Others segments.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees834

Annual revenue₹589 Cr

How does it make money?

Turns over ₹589 Cr a year. Of every ₹100 of sales, about ₹1 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 834 employees supports ₹70.7 lakh of revenue a year, the signature of a people-led business.

EBITDA margin6.4%

Net margin1.4%

Revenue / employee₹70.7 lakh

Who are its competitors?

The closest listed comparisons in its industry are SIEMENS LTD, ABB INDIA LIMITED, LARSEN & TOUBRO LTD., HAVELLS INDIA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

SIEMENS LTDP/E 88.8x · ROE 10.5%

ABB INDIA LIMITEDP/E 92.6x · ROE 19.1%

LARSEN & TOUBRO LTD.P/E 30.1x · ROE 15.2%

HAVELLS INDIA LIMITEDP/E 43.5x · ROE 17.1%

What is its competitive advantage?Little sign of one

Returns on capital of 13.1% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

ROCE13.1%

ROE6.4%

Peer median ROE17.1%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved +24% while net margin moved -78% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+24%

Margin effect-78%

DalalBaazaar Score

36/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ ROE of 6.4% is weak
✗ ROE has fallen by 27.5 points over the period

Quality vs. Valuation

Company Quality

36/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

37/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

104.8x

3Y Median

89.9x

40 monthly readings · mean 99.8x · range 22.3x–246.1x

Sector Median

66.2x

median of 4 sector peers

⚠️Current valuation is approximately 17% above its 3y median of 89.9x. Paying more than usual needs a reason — faster growth, a better balance sheet, or a re-rating you believe in.

⚠️Against its sector it trades 58% above the peer median of 66.2x.

vs. its own history

Fair

89.9x median over 40 months · +17%

vs. sector peers

Expensive

66.2x median of 4 peers · +58%

vs. generic bands

Expensive

Above 35x

P/E (Trailing)

104.8x

P/B

5.97x

EV/EBITDA

24.3x

PEG

—

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well2

Debt is being paid down
Total debt is down 25% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention6

Margins are compressing
EBITDA margin has slipped from 11.5% to 6.4% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Return on equity is falling
ROE has dropped from 33.8% to 6.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 27.8% to 13.1% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 54% against revenue growth of 24% — customers are taking longer to pay.
Short-term liquidity is tight
Current ratio of 0.43 — near-term obligations exceed near-term assets.

Red Flags

7 items require attention · 3 high · 4 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.4x — little room if earnings dip.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 5.1 points, from 11.5% to 6.4%.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹21 Cr in the latest year.
🟡Profit is decliningFinancial
Net profit is down 73% over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 54% against revenue up 24% — sales are being booked faster than they are collected.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.43 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 25% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 11.5% to 6.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 54% against revenue up 24%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 58% above the peer median. That premium needs a reason that persists, or it closes.
Growth barely outpaces inflation
Revenue compounding at 7.6% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 33.8% to 6.4%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 4%✓ 6.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.7x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹21 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.4x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 6% a year✓ 7.6% CAGR
Latest reported year was -21.5%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

3 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✗ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✓ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

2 good · 4 neutral · 5 weak

Market Cap

₹828 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

104.8x

Expensive

Expensive — verify against sector peers

P/B Ratio

5.97x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹1.13

Profitable

Profitable on a per-share basis

ROE

6.4%

Weak

Weak capital efficiency

ROCE

13.1%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.76x

Moderate

Moderate leverage

Revenue Growth (YoY)

-21.5%

Shrinking

Sales are contracting

Profit Growth (YoY)

124.7%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹21 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹118.46

Operating Margin

-0.7%

Weak

Thin margins leave little room for error

Net Margin

0.4%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.43

Tight

Tight short-term liquidity

Beta (vs Nifty)

0.46

Defensive

Steadier than the market

52W Range Position

54%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

122.0 / 128.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

39.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹474 Cr	₹557 Cr	₹544 Cr	₹589 Cr	+7.6%
EBITDA	₹54 Cr	₹45 Cr	₹23 Cr	₹37 Cr	-11.7%
EBITDA Margin	11.5%	8.0%	4.3%	6.4%	—
PAT (Net Profit)	₹31 Cr	₹14 Cr	₹4 Cr	₹8 Cr	-35.4%
EPS	₹4.68	₹2.12	₹0.56	₹1.26	-35.4%
ROE	33.8%	17.1%	3.0%	6.4%	—
ROCE	27.8%	18.4%	11.4%	13.1%	—
Total Debt	₹133 Cr	₹127 Cr	₹116 Cr	₹100 Cr	-9.0%
Free Cash Flow	₹3 Cr	₹34 Cr	₹32 Cr	-₹21 Cr	—

🟢 Revenue has grown at 7.6% a year over 3 years.

🔴 EBITDA has shrunk at 11.7% a year over 3 years.

🔴 EBITDA Margin has fallen from 11.5% to 6.4% over 3 years (-5.1 pts).

🔴 PAT (Net Profit) has shrunk at 35.4% a year over 3 years.

🔴 EPS has shrunk at 35.4% a year over 3 years.

🔴 ROE has fallen from 33.8% to 6.4% over 3 years (-27.5 pts).

🔴 ROCE has fallen from 27.8% to 13.1% over 3 years (-14.7 pts).

🟢 Total Debt has shrunk at 9.0% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹3 Cr to -₹21 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹633 Cr

Total Liabilities

₹501 Cr

Total Debt

₹100 Cr

Cash & Equivalents

₹19 Cr

Operating Cash Flow

₹25 Cr

Capex

-₹46 Cr

Shareholding (proxy)

Institutional Holding

3.2%

Insider Holding

59.2%

Peer Comparison

Company	P/E	ROE
SIEMENS LTD	88.8x	10.5%
ABB INDIA LIMITED	92.6x	19.1%
LARSEN & TOUBRO LTD.	30.1x	15.2%
HAVELLS INDIA LIMITED	43.5x	17.1%

Recent News

1 mixed5 general

Kirloskar Electric clarifies preferential issue fund allocation in AGM corrigendum

scanx.trade, 18 OctFunding

🟡Mixed / dependsNew funding changes the capital structure. Debt raises leverage; an equity raise dilutes existing holders.

Kirloskar Electric Company Ltd. Share Price Live Today

CNBC TV18, 09 Oct

Kirloskar Electric Company Ltd. Stock News: Price Up 9.99%

Univest, 05 Aug

Kirloskar Electric Company (KECL.NS) Rises 4.14% to ₹125.42, Nears Resistance Zone - Schiff Line

siam.in, 05 Oct

Kirloskar Electric shares hit 5% upper circuit as firm aims to raise ₹40 crore from promoters

Upstox, 16 Jul

Kirloskar Electric Company Ltd is Rated Sell

MarketsMojo, 05 Oct

Watch Items

Revenue growth is negative (-21.5%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🔴Business QualityWeak7.5/20

🔴Financial HealthStretched8.6/20

🔴GrowthWeak6.2/20

🔴ProfitabilityWeak4.6/15

🔴ValuationDemanding5.3/15

🔴RiskHigh4/10

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 4%6.4%
✗Debt / EBITDA stays below 2x2.7x
✗Free cash flow remains positive-₹21 Cr
✗Interest cover stays above 3x1.4x
✓Revenue growth stays above 6% a year7.6% CAGR