Kirloskar Brothers Ltd Shares Reach Rs 2000 Mark for the First Time

On June 12, 2024, shares of Kirloskar Brothers Ltd (KBL) achieved a significant milestone by touching the Rs 2000 mark for the first time. The journey to this milestone has been swift, especially in the past year. On May 11, 2023, KBL shares crossed the Rs 500 mark, taking 4,788 days to reach this point. Subsequently, the share price surged to Rs 1,000 by October 19, 2023, within 161 days, followed by a jump to Rs 1,500 on May 14, 2024, in 208 days. Finally, it took just 29 days for the share price to climb from Rs 1,500 to Rs 2,000, reflecting the accelerated pace of growth.

Company Background

Kirloskar Brothers Ltd is a prominent entity within the Pune-based Sanjay Kirloskar Group, recognised as one of India’s largest manufacturers and exporters of pumps. Established in 1920, the company specialises in engineering and manufacturing systems for fluid management. It plays a critical role in large infrastructure projects across sectors such as water supply, irrigation, oil and gas, marine, and defence. With its registered office in Maharashtra, KBL operates six manufacturing units in India and five units globally.

KBL’s operations span multiple verticals, including Building & Construction, Process Industry, Irrigation, Marine & Defence, Oil & Gas, Power, Valves, Water Resource Management, and Retail Pumps. This diversified portfolio underscores the company’s extensive reach and capability in various sectors.

KBL’s market capitalisation has shown impressive growth, standing at Rs 15,869.05 crore, a substantial increase from Rs 1,300 crore five years ago. This growth highlights the company’s strengthened market position and investor trust.

FY24 Financial Performance

Kirloskar Brothers Ltd showcased a strong financial performance in FY24. The Net Revenue from Operations rose by 7% to Rs 4,001.2 crore, compared to Rs 3,730.2 crore in FY23. Gross Profit increased by 15% to Rs 2,076.8 crore, reflecting effective cost management and operational efficiency. Gross Margin improved by 357 basis points (bps) to 51.9%, up from 48.3% in FY23. EBITDA saw a significant rise of 36% to Rs 578.2 crore, with EBITDA margins improving by 302 bps to 14.5%.

Profit Before Tax (PBT) surged by 51% to Rs 480.6 crore, up from Rs 318.1 crore in FY23. After accounting for taxes, the Reported Profit After Tax (PAT) increased by 48% to Rs 349.7 crore, with PAT margins expanding by 242 bps to 8.7%, compared to 6.3% in the previous year.

Enhanced Financial Profile

The financial health of Kirloskar Brothers Ltd is further evidenced by the reduction in borrowings from Rs 286 crore in March 2023 to Rs 192 crore in March 2024. The company’s reserves also increased significantly to Rs 1,703 crore, up from Rs 1,388 crore. Additionally, the company has maintained positive net cash flow for two consecutive years, with cash flow from operations increasing year-on-year.

The shareholding pattern reveals a rise in foreign institutional investors (FII) holdings, which increased to 4.11% in the quarter ending March 2024 from 1.59% in March 2023. Similarly, domestic institutional investor (DII) holdings rose to 9.77% in March 2024 from 9.27% in March 2023. This increase indicates growing investor confidence in the company’s prospects.

Impressive Stock Performance

KBL’s shares have exhibited remarkable performance, reaching a new 52-week high of Rs 2,066.30 and currently trading at Rs 1,964.75, up 7.9% from the previous closing price of Rs 1,820.85. The shares have seen a volume spurt of more than 1.29 times. Year-to-date returns for the shares stand at 119.64%, while one-year returns are at 234.89%. Over five years, the stock has delivered an impressive return of 994.83%.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. The information is based on various secondary sources on the internet and is subject to change. Please consult with a financial expert before making investment decisions.