Prabhudas Lilladher's research report on Kirloskar Pneumatic Company
Kirloskar Pneumatic (KKPC) reported a soft revenue growth of 2.3% YoY, while EBITDA margin contracted by 244bps YoY to 11.8%. During Q1, the company faced lower offtake and execution delays due to geopolitical uncertainties and supply chain disruptions. However, management remains optimistic about the long-term growth prospects amid short-term challenges. In the Air compression, Tezcatlipoca is expected to book highest ever orders worth ~Rs1.0bn in FY26 driven by strong traction from cold chains and industrial applications. Meanwhile, the refrigeration compressors are seeing strong demand from cement, dairy, and chemical sectors. The Gas compression segment faced delays due to global uncertainty. However, management remains confident of delivering ~250 CNG packages in FY26. With soft launch of Tyche compressors company aims at replacing European imports, and plans to scale up production from Q2FY26. Looking ahead, management is confident of achieving revenue of ~Rs20bn in FY26 supported by repeat orders for its new products, finalization of orders in biogas and hydrogen, and demand recovery in commercial refrigeration segment.
Outlook
We maintain our ‘Buy’ rating with a TP of Rs1,636 (same as earlier) valuing the business at a PE of 35x Mar’27E (same as earlier).
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