Driving future growth through global expansion
Pumps are essential devices used in a variety of applications, from drinking water supply to industrial fluid movement. This is of great importance in agriculture for irrigation, in homes for water supply, and in industry for cooling and heating systems.
Pumps play a vital role in our daily lives and economy by ensuring that water reaches our homes, farms and factories. Kirloskar Brothers (KBL) is a renowned name in the pump manufacturing industry, known for its innovative and reliable products.
The company boasts a long history and has established a significant presence in domestic and overseas markets. Kirloskar pumps are used in various fields including agricultural, industrial and domestic applications and have made the company famous in India and other parts of the world.
One of Kirloskar Brothers’ notable achievements has been its contribution in providing drinking water to over 35% of India’s population. This achievement highlights the company’s commitment to improving access to clean water and improving the quality of life for millions of people.
Note: If you want to learn candlestick and chart trading from scratch, here are some of the best books available on Amazon! Get the book now!
The company’s stock price has soared nearly 200% over the past year, tripling investors’ wealth. Even over a three-year period, this stock has delivered an impressive 483% return.
In this article, we will take a closer look at Kirloskar Brothers’ corporate overview, explore its various business segments, analyze its financial performance, and discuss its future prospects.
Kirloskar Brothers Corporate Overview
Kirloskar Brothers (KBL), founded in 1888 and incorporated in 1920, is the flagship company of the Kirloskar Group. A world-class pump manufacturer with experience in engineering and fluid management systems.
The company is one of the largest pump manufacturers with a wide range of products including pumps, valves and turbines. They design, manufacture and develop a variety of cutting-edge systems for total fluid management.
The company’s technologies range from large-scale infrastructure projects such as water supply, irrigation, power generation, oil and gas, building construction, industry, marine and defence, to small pumps for domestic and agricultural use.
Kirloskar Brothers business divisions
water
The water sector has enormous growth potential as state governments widely implement the Jal Jeevan Mission (JJM) and AMRUT 2.0 initiatives to improve water supply in rural India.
The solar industry is expanding in both institutional and public markets. The company’s efforts in both the water and solar industries have resulted in large orders from large OEMs and mid-sized contractors.
valve
In the financial year 2022-23, the valves segment witnessed robust growth driven by an increase in new orders. The government’s strong focus on clean drinking water and sanitation projects has created ample opportunities in this sector.
The division also received repeat orders for large valves in major irrigation projects.
architecture and construction
The sector experienced a healthy 25% growth in fiscal 2022-23. The FM/UL fire pumps were commissioned at GMR Goa International Airport Limited and Sabarmati high-speed rail depot in Ahmedabad.
industry
Industry companies experienced significant revenue growth in fiscal 2022-23, led by the steel, chemicals, sugar and liquid zero emissions segments. The addition of additional customers increased sales and transaction volume.
The industrial company has reached new heights with landmark orders for several packages in the steel and chemicals sectors. Alternative business opportunities increased by 12-15%. The company has also benefited in terms of booking value-added products across various consumer categories.
oil and gas
The company’s Oil & Gas segment offers non-API pumps for upstream, midstream and downstream applications such as crude oil transfer, refining processing and fertilizers. In fiscal 2022-23, the segment’s revenue grew by 29%, driven by high demand from the oil and gas sector, among others.
The company’s strong emphasis on innovation, quality and customer happiness has helped it build a significant presence in both domestic and international markets.
Small pump business
The small pump company has been strategically restructured for the 2022-23 financial year in response to changing market conditions and previous learnings. As market acceptance of ‘energy-saving products’ increases, the demand for KBL’s energy-efficient pumps has also increased.
Strategic promotional activities combined with new product launches helped the company expand into a wider market.
Also read…
finance Kirloskar Brothers
In FY 2023, Kirloskar Brothers saw significant growth in its revenue, surging 22% to reach ₹3,730.22 crore compared to ₹3,057.63 crore in FY 2022. After analyzing four years from 2020 to 2023, the company recorded a compound annual growth rate (CAGR) of 6%.
At the same time, there has been a notable increase in net profit, with a 176% increase from Rs 81.53 billion in FY 2022 to Rs 225.06 billion in FY 2023. Cumulative net profit recorded a CAGR of 49% over the four years from fiscal 2020 to fiscal 2023.
In FY23, Kirloskar Brothers maintained favorable financial metrics with return on equity (ROE) of 17.44% and return on invested capital (ROCE) of 20.29%.
Future Plans Kirloskar Brothers
Future growth prospects
Kirloskar Brothers appears optimistic about its future growth prospects. The company believes the positive demand trends seen this quarter will continue in the coming quarters, driven by solid order volumes.
Additionally, Kirloskar Brothers takes a multi-dimensional approach to value creation with the goal of strengthening its market position, increasing profitability and maximizing stakeholder value by maximizing its strong potential.
Focus on international markets
The company appears to be focusing on entering overseas markets. Kirloskar Brothers has achieved considerable success. invest This is true in our services business, which is a highly profitable business, as evidenced by the numerous framework agreements currently active in all our subsidiaries around the world.
The company is also working to expand its product portfolio in international markets, especially in segments such as fish-friendly pumps and multi-stage multi-outlet pumps for fire protection.
solid order book
Kirloskar Brothers order book position looks strong and provides visibility into future growth. As of March 2024, the company’s standalone pending order book stood at Rs.1,826 crores, while its consolidated pending order book stood at Rs.2,999 crores, reflecting a growth of 4% year-on-year.
The company’s focus on expanding its services business and product portfolio, combined with its healthy order book, bodes well for its future performance.
Emphasis on operational excellence
The company also focuses on operational excellence. We have implemented initiatives such as maintaining total quality production and establishing larger stores to improve efficiency, delivery consistency and customer service. These efforts are expected to strengthen Kirloskar Brothers’ competitiveness and support its sustainable growth trajectory.
Overall, Kirloskar Brothers appears to be well positioned to capitalize on growth opportunities in domestic and international markets. With a solid order book, diverse product portfolio, focus on operational excellence, and investments in high-margin businesses, the company’s future prospects look promising.
But what do you think about the future prospects of Kirloskar Brothers? Do you think the company can maintain its momentum and continue to achieve strong financial performance? Share your insights and perspectives on your company’s growth trajectory.
Written by Nalin Surya
By leveraging the Stock Screener, Stock Heatmap, Portfolio Backtesting and Stock Comparison tools on the Trade Brains portal, investors have access to comprehensive tools to identify the best stocks, stay updated and informed with stock market news. invest.
Start your stock market journey now!
Want to learn stock market trading and investing? Check out exclusive stock market courses from FinGrad, a learning initiative from Trade Brains. You can sign up for free courses and webinars from FinGrad and start your trading career today. Sign up now!!
