Kirloskar Brothers Limited

Industrials — Specialty Industrial Machinery · NSE

₹1,685.20−₹8.20 (−0.48%)

DalalBaazaar Score

65 / 100

🟢 Good

Verdict

REASONABLE

Risk

Low

Driven by small-cap size, which brings sharper price swings, falling profits.

In simple words: Strong business and financial position, though profits are falling even as sales grow. The direction of profits is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Kirloskar Brothers Limited provides fluid management solutions worldwide.

IndustrySpecialty Industrial Machinery

SectorIndustrials

Employees2,582

Annual revenue₹4,481 Cr

How does it make money?

Turns over ₹4,481 Cr a year. Of every ₹100 of sales, about ₹8 reaches shareholders as profit, with ₹13 left at the operating level before interest, tax and depreciation. Each of its 2,582 employees supports ₹1.74 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹1.74 Cr

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.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 17.4% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE17.1%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +22% while net margin moved +30% 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+22%

Margin effect+30%

DalalBaazaar Score

65/ 100

Good

Weighted across six categories. Every point is explained below.

• P/E of 35.8x already prices in growth
• P/E is close to its own historical median of 37.0x
✗ P/B of 5.43x is a steep premium to book

Quality vs. Valuation

Company Quality

71/ 100

Good

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

Valuation

52/ 100

Fair

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

35.8x

3Y Median

37.0x

40 monthly readings · mean 39.4x · range 25.6x–82.4x

Sector Median

66.2x

median of 4 sector peers

🟡Currently trading close to its 3y median of 37.0x — the market is paying about what it usually pays for this company.

🟢Against its sector it trades 46% below the peer median of 66.2x.

vs. its own history

Fair

37.0x median over 40 months · -3%

vs. sector peers

Cheap

66.2x median of 4 peers · -46%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

22.0x

PEG

2.14

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 11.3% to 13.4% over 3 years.
Debt is being paid down
Total debt is down 13% over 3 years.
Very low debt
Debt/Equity of 0.10x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention1

Return on capital is falling
ROCE has declined from 20.6% to 17.4% — often a sign of competition or overexpansion.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 11.3% to 13.4%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 46% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Self-funding with balance-sheet headroom
Positive free cash flow of ₹199 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
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?

Growth barely outpaces inflation
Revenue compounding at 6.9% 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.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

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

1EBITDA margin holds above 11%✓ 13.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 5% a year✓ 6.9% CAGR
Latest reported year was 12.9%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹199 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 14%✓ 17.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 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

6 good · 3 neutral · 2 weak

Market Cap

₹13,382 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

35.8x

Fair

Fairly valued against the generic band

P/B Ratio

5.43x

Rich

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

EPS (TTM)

₹47.02

Profitable

Profitable on a per-share basis

ROE

15.2%

Strong

Strong capital efficiency

ROCE

17.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.10x

Low

Conservative leverage

Revenue Growth (YoY)

12.9%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-0.1%

Falling

Profits are shrinking

Dividend Yield

0.42%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹199 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

8.0%

Average

Average margins

Net Margin

8.0%

Average

Average bottom-line conversion

Current Ratio

1.83

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.31

Defensive

Steadier than the market

52W Range Position

41%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

1745.6 / 1826.5

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

39.4

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹3,672 Cr	₹3,938 Cr	₹4,423 Cr	₹4,481 Cr	+6.9%
EBITDA	₹415 Cr	₹591 Cr	₹660 Cr	₹602 Cr	+13.2%
EBITDA Margin	11.3%	15.0%	14.9%	13.4%	—
PAT (Net Profit)	₹235 Cr	₹348 Cr	₹415 Cr	₹374 Cr	+16.7%
EPS	₹29.59	₹43.84	₹52.29	₹47.05	+16.7%
ROE	16.7%	20.3%	19.8%	15.2%	—
ROCE	20.6%	25.8%	24.8%	17.4%	—
Total Debt	₹286 Cr	₹192 Cr	₹182 Cr	₹250 Cr	-4.4%
Free Cash Flow	₹196 Cr	₹258 Cr	₹296 Cr	₹199 Cr	+0.5%

🟢 Revenue has grown at 6.9% a year over 3 years.

🟢 EBITDA has grown at 13.2% a year over 3 years.

🟢 EBITDA Margin has risen from 11.3% to 13.4% over 3 years (+2.1 pts).

🟢 PAT (Net Profit) has grown at 16.7% a year over 3 years.

🟢 EPS has grown at 16.7% a year over 3 years.

🔴 ROE has fallen from 16.7% to 15.2% over 3 years (-1.6 pts).

🔴 ROCE has fallen from 20.6% to 17.4% over 3 years (-3.1 pts).

🟢 Total Debt has shrunk at 4.4% a year over 3 years.

🟡 Free Cash Flow has been broadly flat over 3 years (0.5% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹4,407 Cr

Total Liabilities

₹1,931 Cr

Cash & Equivalents

₹401 Cr

Operating Cash Flow

₹334 Cr

Capex

-₹135 Cr

Shareholding (proxy)

Institutional Holding

13.1%

Insider Holding

69.2%

Corporate Actions

Dividend Rate

₹7

Ex-Dividend Date

24 Jul 2026

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

3 mixed3 general

Kirloskar Brothers passes special resolution for Kanitkar's appointment

scanx.trade, 16 Oct

Kirloskar Brothers Share Price Rise Nearly 8% After Getting ₹214 Crore Adani Power Pump Contract

HDFC Sky, 06 MarPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Kirloskar Brothers shares jump 7%; key technical levels to watch out for

Business Today, 22 JunPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Kirloskar Brothers targets double-digit revenue growth, bets on domestic and overseas demand

CNBC TV18, 03 Aug

Clean Science, Kirloskar Brothers, Urban Company shares surge amid heavy volumes; check full list

Upstox, 22 JunPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Kirloskar Group-Backed Industrial Products Company Secures Rs 149.59 Crore International Order for Vertical Pumps and Spares

Dalal Street Investment Journal, 14 Jul

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongFinancial Health · Growth · Profitability

MiddlingBusiness Quality · Risk

WeakValuation

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself.

All 5 tripwires holding · see Key things to watch ↑