Kirl. Brothers Q2 FY27 Results (NSE: KIRLOSBROS)
Signal: Margin pressure
The read
Revenue growth inflected sharply to +24.2% YoY from -0.8% in Q2FY26, but this is not yet a margin recovery: consolidated EBITDA margin contracted 200bps to 9.7% as raw material intensity rose 540bps to 52.5%, leaving PAT growth at 11.2% and EPS growth at only 3.8%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,276.7 Cr | +24.2% | +15.5% |
| EBIT | ₹95.4 Cr | -0.5% | |
| Net profit | ₹74.7 Cr | +11.2% | |
| EPS | ₹9.28 | +3.8% | |
| EBIT margin | 9.7% |
P&L walk
Consolidated revenue accelerated to ₹12,767 million, +24.2% YoY and +15.5% QoQ, but raw material intensity rose to 52.5% from 47.1%, compressing EBITDA margin to 9.7% from 11.7%; PAT still increased 11.2% to ₹747 million, helped by lower finance costs but lagging revenue growth.
Segments
The group reports a single Fluid Machinery and Systems segment; consolidated revenue grew 24.2% YoY to ₹12,767 million, while standalone revenue grew 22.8% to ₹7,991 million and standalone PAT growth of 44.7% was aided by the prior-year ₹564 million provision write-back.
Key positives
- Consolidated revenue reached ₹12,767 million, up 24.2% YoY and 15.5% QoQ, reversing the prior three-quarter YoY decline sequence.
- International revenue grew 25.3% YoY to ₹4,633 million, slightly faster than domestic revenue growth of 23.6%.
- Finance costs fell 45.3% YoY to ₹98 million, supporting PAT growth despite a 200bps EBITDA-margin contraction.
- Employee and other operating expenses grew 11.9% YoY versus revenue growth of 24.2%, providing partial cost absorption.
Key concerns
- Consolidated gross margin compressed 430bps YoY to 47.8% as raw material cost rose to 52.5% of revenue from 47.1%; the filing does not disclose a mitigation or pricing response.
- EBITDA margin fell 200bps YoY to 9.7%, extending the recent margin-contraction pattern after 13% OPM in Q4FY26 and 10% in Q1FY27.
- Standalone H1 operating cash flow was negative ₹1,005 million versus positive ₹277 million YoY, while inventory increased to ₹6,947 million from ₹5,752 million.
- EPS rose only 3.8% to ₹9.28 against 10.5% parent PAT growth to ₹737 million, requiring reconciliation despite unchanged paid-up capital.
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