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INVESTMENT INSIGHTS

Check Before You Invest : Kirloskar Brothers Ltd

BSE: 500241 NSE: KIRLOSBROS ISIN: INE732A01036
  |   Sector:  Capital Goods & Industrial Consumables   |   Industry:  Compressors / Pumps

Snapshot

Q.1 Which industry/sub-sector does Kirloskar Brothers Ltd belong to?
Kirloskar Brothers Ltd belongs to the Capital Goods & Industrial Consumables sector, operating specifically within the Compressors / Pumps segment.
Q.2 Is Kirloskar Brothers Ltd a good quality company?
Kirloskar Brothers Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Kirloskar Brothers Ltd undervalued or overvalued?
Kirloskar Brothers Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 53.91 37.93
Price to Book 6.97 5.49
Price to Sales 4.56 2.74
EV to EBITDA 29.4 22.32
Q.4 Is Kirloskar Brothers Ltd a good buy now?
Kirloskar Brothers Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Kirloskar Brothers Ltd?
Kirloskar Brothers Ltd revenue growth is 6.7% for FY-2025, which is in line with its 5-year CAGR of 6.71%, indicating stable growth.

Q.2 Gross Profit margin of Kirloskar Brothers Ltd?
Kirloskar Brothers Ltd Gross profit margin which is the profit after deduction of direct costs, is 13.4% for FY-2025, which is above its 5-year median of 10.3%, indicating increasing margins.

Q.3 Operating Profit Margin of Kirloskar Brothers Ltd?
Kirloskar Brothers Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 12.38% for FY-2025, which is above its 5-year median of 9.67% indicating increasing margins.

Q.4 Net Profit Margin of Kirloskar Brothers Ltd?
Kirloskar Brothers Ltd Net Profit Margin is 9.03% for FY-2025, is above its 5-year median of 6.01%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 13.4 10.3
Operating Profit Margin (%) 12.38 9.67
Net Profit Margin (%) 9.03 6.01

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Kirloskar Brothers Ltd?
Kirloskar Brothers Ltd Return on Asset is 10.13%, which is above its 5-year historical median of 6.56%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Kirloskar Brothers Ltd?
Kirloskar Brothers Ltd Return on capital employed is 22.28% for FY-2025, which is above its 5-year historical median of 16.21%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Q.7 Return on Equity (ROE) of Kirloskar Brothers Ltd?
Kirloskar Brothers Ltd Return on equity is 16.83% for FY-2025, which is above its 5-year historical median of 12.84%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Kirloskar Brothers Ltd?
Kirloskar Brothers Ltd Cash conversion cycle is 39 days, in line with its 5-year historical median of 38 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 1.14 1.11
ROE (%) 16.83 12.84
ROCE (%) 22.28 16.21
Cash Conversion Cycle 39 days 38 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Kirloskar Brothers Ltd?
Kirloskar Brothers Ltd Debt-to-Equity ratio is 0.01, which is lower the industry average of 0.07, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Kirloskar Brothers Ltd?
Kirloskar Brothers Ltd Debt to cash flow from operations is 0.04, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Kirloskar Brothers Ltd?

Q.1 Promoter shareholding and pledge status of Kirloskar Brothers Ltd?
Promoters hold 65.95% of the Kirloskar Brothers Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Kirloskar Brothers Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Kirloskar Brothers Ltd vs industry peers?
Kirloskar Brothers Ltd revenue CAGR is 6.71%, compared to the industry median CAGR of 14.24%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 6.7 14.2
Gross Profit Growth (%) 6.2 18.9
Operating Profit Growth (%) 6.9 20.5
Net Profit Growth (%) 7.8 20.9
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.14 1
ROE (%) 16.83 15
ROCE (%) 22.28 19.99
Cash Conversion Cycle (days) 38.96 92

Valuation & price assessment

Q.1 Stock return of Kirloskar Brothers Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 29% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 29% 40.6% 42.1% -12.8%
Q.2 Valuation ratios of Kirloskar Brothers Ltd vs historical?
The current P/E ratio of 53.91 is higher than its historical median of 37.93, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 53.91 37.93 37.40
Price to Book 6.97 5.49 5.31
Price to Sales 4.56 2.74 3.28
EV to EBITDA 29.4 22.32 22.66

Check more companies

1. Elgi Equipments
2. KSB
3. Kirloskar Brothers
4. Ingersoll Rand
5. Kirloskar Pneumatic
6. Dynamatic Tech
7. Shakti Pumps (I)
8. Oswal Pumps
9. WPIL
10. Roto Pumps

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2. Neuland Laboratories Ltd.
3. Samvardhana Motherson International Ltd.
4. Divis Laboratories Ltd.
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