Q1 2027 Kirloskar Brothers Ltd Earnings Call

Speaker #1: Ladies and gentlemen, good day and welcome to the Q1 FY27 Kirloskar Brothers Limited conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Operator 2: Ladies and gentlemen, good day and welcome to the Q1 FY27 Kirloskar Brothers Limited conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not the guarantees of the future performance of the company as on the date of this call. These statements are not the guarantees of the future performance and involve risks and uncertainties that are difficult to predict.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on your touchscreen phone. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call.

Speaker #1: These statements are not guarantees of the future performance of the company as on the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict.

Speaker #1: I now have the conference award to Mr. Sanjay Kirloskar, Chairman and Managing Director, Kirloskar Brothers Limited. Thank you, and over to you, sir.

Operator 2: I now hand the conference over to Mr. Sanjay Kirloskar, Chairman and Managing Director from Kirloskar Brothers Limited. Thank you, over to you, sir.

Speaker #2: Thank you. Good afternoon, everyone. On behalf of Kirloskar Brothers Limited, I extend a very warm welcome to all who have joined us on our call today.

Sanjay Kirloskar: Thank you. Good afternoon, everyone. On behalf of Kirloskar Brothers Limited, I extend a very warm welcome to all who have joined us on our call today. I hope everyone has had an opportunity to go through the financial results and the investor presentation, which have been uploaded on the stock exchange and on the company's website. On this call with me, I have Mr. Alok Kirloskar, Managing Director, Kirloskar Brothers International B.V., Mr. Rama Kirloskar, Joint MD, KBL, and MD, Kirloskar Ebara Pumps Limited, Mr. Bhavesh Chheda, our Chief Financial Officer, Mr. Devang Trivedi, our Company Secretary, and Strategic Growth Advisors, our investor relations advisors. Let me begin my remarks by giving some business highlights. Pleased to report that for Q1 of FY27, our consolidated revenues stood at INR 11,049 million, registering a healthy 13% growth year on year.

Speaker #2: I hope everyone has had an opportunity to go through the financial results and the investor presentation, which have been uploaded on the stock exchange and on the company's website.

Speaker #2: On this call with me, I have Mr. Alok Kirloskar, Managing Director of Kirloskar Brothers International BV; Ms. Rama Kirloskar, Joint MD of KBL and MD of Kirloskar Ebara Pumps Limited; Mr. Bhavesh Chadha, our Chief Financial Officer; Mr. Devang Trivedi, our Company Secretary; and Strategic Growth Advisors, our Investor Relations Advisors.

Speaker #2: Let me begin my remarks by giving some business highlights. I am pleased to report that for Q1 of fiscal year 2027, our consolidated revenues stood at Rs.

Speaker #2: 11,049 million, registering a healthy 13% growth year-on-year. This performance was driven by robust demand across our diverse portfolio of products and services, reflecting our strong market positioning, customer-centric approach, and execution capabilities.

Sanjay Kirloskar: This performance was driven by robust demand across our diverse product portfolio of products and services, reflecting our strong market positioning, customer-centric approach, and execution capabilities. Growth was well supported by sustained momentum across both domestic and international markets, so we continued to capitalize on emerging opportunities and strengthen our presence. Our consolidated EBITDA for the quarter stood at INR 1,306 million, registering a 2% year-on-year growth with EBITDA margin of 11.8%. During the quarter, we also recorded good order inflows across both domestic and international markets. Our consolidated order intake grew by 4% year-on-year to INR 13,954 million, providing continued visibility for future growth. Turning to our standalone domestic business for Q1 FY27, revenue increased by 9% year-on-year to INR 6,738 million, while EBITDA grew by 16% to INR 920 million. Profit after tax stood at INR 540 million, reflecting a 15% year-on-year growth.

Speaker #2: Growth was well supported by sustained momentum across both domestic and international markets, so we continue to capitalize on emerging opportunities and strengthen our presence.

Speaker #2: Our consolidated EBITDA for the quarter stood at Rs 1,306 million, registering a 2% year-on-year growth, with an EBITDA margin of 11.8%. During the quarter, we also recorded good order inflows across both domestic and international markets. Consolidated order intake grew by 4% year-on-year to Rs...

Speaker #2: 13,954 million, providing continued visibility for future growth. Turning to our standalone domestic business, for Q1 FY27, revenue increased by 9% year-on-year to Rs 6,738 million, while EBITDA grew by 16% to Rs

Speaker #2: 920 million. Profit after tax stood at Rs. 540 million, reflecting a 15% year-on-year growth. Our healthy order book, coupled with our focused approach towards high-potential business opportunities, provides us with confidence in our growth outlook.

Sanjay Kirloskar: Our healthy order book, coupled with our focused approach towards high potential business opportunities, provides us with confidence in our growth outlook. We remain confident of delivering double-digit revenue growth in FY27 over FY26 for our standalone business. As on 26 June, our standalone pending orders amounted to INR 25,577 million, excluding small pumps order book, reflecting a strong pipeline. Further, we are seeing good order inflows across segments. On the international front, we reported a 19% year-on-year growth in revenue during Q1 FY27. This performance was primarily driven by strong execution across SPP USA and Kirloskar Brothers (Thailand) Limited. SPP USA continues to witness encouraging traction in data centers, fire, and HVAC projects. EBITDA stood at INR 207 million with EBITDA margin of 5.1%. This moderation was primarily attributable to a lower contribution from the services business, which traditionally carries higher margins.

Speaker #2: We remain confident of delivering double-digit revenue growth in FY27 over FY26 for our standalone business. As of June 26, our standalone pending orders amounted to Rs.

Speaker #2: The order book stands at ₹25,577 million, excluding small pumps, reflecting a strong pipeline. Further, we are seeing good order inflows across segments. On the international front, we reported a 19% year-on-year growth in revenue during Q1 FY27.

Speaker #2: This performance was primarily driven by strong execution across SPP USA and Kirloskar Brothers Thailand Limited. SPP USA continues to witness encouraging traction in data centers, fire, and HVAC projects.

Speaker #2: EBITDA stood at Rs 207 million, with an EBITDA margin of 5.1%. This moderation was primarily attributable to a lower contribution from the services business, which traditionally carries higher margins.

Speaker #2: We are actively focused on expanding the service portfolio, which we believe will support improvement going forward. Our overseas spending order book stood at Rs.

Sanjay Kirloskar: We are actively focused on expanding the services portfolio, which we believe will support improvement going forward. Our overseas pending order book stood at INR 15,045 million, providing strong visibility for the coming quarters. Looking ahead, we remain optimistic about the company's growth trajectory backed by a healthy mix of domestic and international business, a robust order pipeline, and continued focus on operational excellence. The company is well positioned to deliver sustainable growth in periods ahead. This is all from my side. We can now begin the Q&A session. Thank you.

Speaker #2: 15,045 million, providing strong visibility for the coming quarters. Looking ahead, we remain optimistic about the company's growth trajectory, backed by a healthy mix of domestic and international business, a robust order pipeline, and continued focus on operational excellence.

Speaker #2: The company is well positioned to deliver sustainable growth in the periods ahead. This is all from our side. We can now begin the Q&A session.

Speaker #2: Thank you.

Speaker #1: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.

Operator 2: Thank you very much. We will now begin the question round. Anyone who wishes to ask a question may press star 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking a question. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Manish Goel from ThinkWise Wealth Management. Please proceed.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions.

Speaker #1: Ladies and gentlemen, please wait a moment while the question queue assembles. The first question is from the line of Manish Goel from Thinkwise Wealth Advisors.

Speaker #1: Please proceed.

Speaker #2: Yeah. Thank you so much, sir. I have a couple of questions. Just on the standalone business, sir, an observation on the stock adjustment: it seems that dispatches are being delayed because we have an inventory buildup. Like in Q1 also, stock adjustment is ₹82 crores.

Manish Goel: Thank you so much, sir. I have a couple of questions. Just on the standalone business observation on the stock adjustment, it seems that dispatches are being delayed or because we have an inventory buildup. In Q1 also, stock adjustment is INR 82 crore and FY26 annual report also shows that inventory work in progress has jumped from INR 180 to INR 241. Advances to suppliers have jumped from INR 32 crore to INR 91 crore. Sir, does it imply that lot of dispatches are withheld or is there any constraint on that front which is probably hindering the double-digit growth for us? That was the first question. Second question is, sir, you did allude that SPP UK had a revenue mix issue with lower services contributions.

Speaker #2: And FY26 annual report also shows that inventory work-in-progress has jumped from 180 to 241. Advances to suppliers have jumped from 32 crores to 91 crores.

Speaker #2: So, sir, does it imply that a lot of dispatches are being withheld, or is there any constraint on that front which is possibly hindering double-digit growth for us?

Speaker #2: That was the first question. Second question is, sir, you did allude that SPP UK had a revenue mix issue, with lower services contribution, sir.

Manish Goel: By when should we be able to see the benefit of expansion of the service portfolio to start reflecting in improvement in margins for SPP UK? Also, Rodelta has again seen a jump in losses in the current quarter. Maybe how should we look at, in context of SPP UK and Rodelta, overall overseas subsidiaries performance going forward? Thank you.

Speaker #2: So, by when should we be able to see the benefit of the expansion of the service portfolio start reflecting in an improvement in margins for SPP UK?

Speaker #2: And also, Rodelta has again seen a jump in losses in the current quarter. So maybe, how should we look at it in the context of SPP UK and Rodelta overall overseas subsidiaries' performance going forward?

Speaker #2: Thank you.

Speaker #3: Thank you, Mr. Goel. Yes, inventory has gone up, as we had explained in the previous quarter. We were improving our foundry, and that exercise is complete. But what had happened was some of the orders were half completed and half not, and that is why we couldn't ship out the whole order.

Sanjay Kirloskar: Thank you, Mr. Goel. Yeah, inventory has gone up as we had explained in the previous quarter. We were improving our foundries and that exercise is complete. What had happened was some of the orders were half completed and half not, and that is why we couldn't ship out the whole order. This month itself, we've seen huge improvements, which we believe will be reflected in the current quarter.

Speaker #3: But this month itself, we've seen huge improvements, which we believe will be reflected in the current quarter.

Alok Kirloskar: Mr. Goel, you asked two questions. One is about SPP UK and Rodelta. As I mentioned, I think last time also, we expect that in their Q3, the numbers should improve because that's how the order book was structured because a lot of the historic, as you know, chemical and petrochemical, oil and gas order books, the service order books were effectively delayed or they were not really placed in large numbers because the plant was idling. I saw it circulating a lot even on LinkedIn about how the INEOS chairman has issued around the oil price.

Speaker #2: Mr. Goel, you know you asked two questions. One is about SPP UK and Rodelta. As I mentioned, I think last time also, we expect that in their third quarter the numbers should improve, because that's how the order book was structured. A lot of the historic, as you know, chemical and petrochemical oil and gas order books—sorry, the service order books—were effectively delayed, or they were not really placed in large numbers because the plants were idling. I think you, I saw it circulating a lot even on LinkedIn about how the INEOS chairman has written about the oil price.

Speaker #3: Sorry, sorry, Alok. There was a disconnection after Mr. Sanjay Kirloskar spoke about dispatches. We could not hear anything.

Manish Goel: Sorry, Alok. There was a disconnection after Mr. Sanjay Kirloskar spoke about dispatches.

Alok Kirloskar: Okay.

Manish Goel: We could not hear him.

Speaker #2: Can you hear me now?

Alok Kirloskar: Can you hear me now?

Speaker #3: Now, yes, Alok.

Manish Goel: Now, yes, Alok.

Speaker #2: Okay, so I just mentioned that—you know, you talked about SPP UK and Rodelta. I mentioned last time also that the services business should start kicking in in the third quarter.

Alok Kirloskar: I just said that you mentioned about SPP UK and Rodelta. I mentioned last time also that the services business should start kicking in Q3 for them, which is Q2 for us here. That's just because of the way the product mix was. I had explained that the chemical and petrochemical business service contracts related to chemical and petrochemical businesses were idling. I only said that you probably saw even a letter on LinkedIn where the chairman of Ineos was mentioning how the high prices of energy have been killing the chemical industry in Europe and the UK. I mean, that's reflective of that.

Speaker #2: Third quarter for them, which is second quarter for us here. And that's just because of the way the product mix was. I had explained that, you know, the chemical and petrochemical business service contracts related to chemical and petrochemical businesses were idling, and I only said that you probably saw even a letter on LinkedIn where, you know, the Chairman of INEOS was mentioning how the high prices of energy have been killing the chemical industry in Europe and the UK.

Speaker #2: So, I mean, that's reflective of that, but as I mentioned, we've got contracts with power plants, with water utilities, and a lot of those should come into effect, which will again get the blended margins back to a better level.

Alok Kirloskar: As I mentioned, we've got contracts with power plants, with water utilities, and a lot of those should come into effect, which will again get the blended margins back to a better level, going into the last two quarters for them and three quarters for us. On the Rodelta side, I would say it's really delayed execution because you are seeing them all together, all our Dutch entities together. We expect in the next two quarters for that to get better. We are quite optimistic about both the entities. We expect it to be in line with what we've always said, that all the entities will be profitable and that we will look to have better than previous year numbers.

Speaker #2: You know, going into the last two quarters for them, and three quarters for us. On the Rodelta side, I would say it's really delayed execution, because you're seeing them all together—all our Dutch entities together.

Speaker #2: And we expect in the next two quarters for that to get better. So you know, we are quite optimistic about both the entities and we expect it to be in line with, you know, what we've always said, that all the entities will be profitable and that we will look to have better than previous year numbers.

Speaker #3: And Alok, if you can also talk about how we are looking at US operations now, going forward.

Manish Goel: Alok, if you can also talk about how are we looking at US operations now going forward?

Speaker #2: Yes, the US operations—I think you have the numbers—are growing at quite a fast pace. In the breakup in this presentation, I think you've seen that it's grown about 20-plus percent in the first quarter, quarter to quarter.

Alok Kirloskar: Yes, the US operations, I think you have the numbers. It is growing at quite a fast pace. In the breakup of this presentation, I think you've seen that it's grown about 20% plus quarter to quarter. A lot of it is from data centers as well as US infrastructure projects. We continue to be strong. We are under NDA, but we are looking to sign in the last steps of signing a further multinational framework contract with a major US operator of data centers, which is not just for pumps but modular systems. We are still very optimistic about how we look to see the US growing in the future. Does that answer your question?

Speaker #2: And a lot of it is from data centers as well as US infrastructure projects. We continue to be strong. We are under NDA, but we are in the last steps of signing a further framework, multinational framework contract with a major US operator of data centers.

Speaker #2: So, which is not just for pumps, but modular systems. So, you know, we are still very optimistic about, you know, how we look to see the US growing in the future.

Speaker #2: Does that answer your question?

Speaker #3: No, so you said multi-year framework contracts—for which industry? In the US?

Manish Goel: No. You said multi-year framework contract for which industry in US?

Speaker #2: No, for data center operator.

Alok Kirloskar: No, for data center operator.

Speaker #3: Okay, okay, okay. In the US, right?

Manish Goel: Okay. In US, right?

Speaker #2: Data center operator, yeah, for all their historically, we worked with them in the US, but now we'll work with them globally, wherever they put up data centers and they are a very large I mean, I can't mention to you because we have an NDA, but it's a very large operator.

Alok Kirloskar: Data center operator, yeah. Historically, we worked with them in the US, but now we'll work with them globally wherever they put up data centers. They are very large. I can't mention to you because we have an NDA, but it's a very large operator.

Speaker #3: Okay, okay, okay, okay, okay. I have a few more questions. I'll come back in that case. Thank you so much.

Manish Goel: Okay. I have few more questions. I'll come back in that case. Thank you so much.

Speaker #1: Thank you. The next question is from the line of Raj Shah from Inam AMC. Please proceed.

Operator 2: Thank you. The next question is on the line of Raj Shah from Enam AMC. Please proceed.

Speaker #4: Yes, thank you very much for the opportunity. Sir, my first question is on the order inflow side. Though the prospects have been good, as you mentioned in the opening three months as well, the order inflow number was up by just 4%, and on a standalone basis it was up by just 3% as well.

Raj Shah: Yes. Thank you very much for the opportunity. Sir, my first question was on the order inflow side. The prospects have been good, as you have mentioned in opening remarks as well. Order inflows number was just up by 4% and in standalone it was up just by 3% as well. If you can throw some light on why this number was low single digit. If it could have been better, in which areas?

Speaker #4: So, if you can throw some light on why this number was in the low single digits, and if it could have been better, in which areas?

Speaker #1: So some of those orders were delayed in the quarter. That's one of the reasons why you don't see that. But the growth on a standalone basis is around 14.9% for booking.

Rama Kirloskar: Some of those orders were delayed to this quarter. That's one of the reasons why you don't see that.

Raj Shah: Okay.

Rama Kirloskar: the growth on a standalone basis is around 14.9% for bookings.

Speaker #3: Year on year.

Bhavesh Chheda: Year-on-year.

Speaker #1: So, are you talking about a certain sector?

Rama Kirloskar: Are you talking about a certain sector?

Speaker #4: No, I was talking about the order inflow.

Raj Shah: No, I was talking about the order inflow.

Speaker #1: Yeah, that is the booking.

Rama Kirloskar: Yeah, that is the booking.

Speaker #4: Yes, yes. So it has been delayed. So in the following quarters, you see good order inflow.

Raj Shah: Yes.

Rama Kirloskar: It's about 14-

Raj Shah: It has been delayed, so in the following quarters you see good order inflow.

Speaker #1: So there was a certain large order that got delayed, but other than that, we were asked for the plan.

Rama Kirloskar: There was a certain large order got delayed, but other than that, we were as per plan.

Speaker #4: Okay. In the order book.

Raj Shah: Okay. In the order book.

Manish Goel: If you look at the growth over the last year's Q1, there has been a 14.9% growth in order intake.

Speaker #3: Compared to last year's first quarter, there has been a 14.9% growth in order intake.

Speaker #4: Okay. Okay. When I see your order book standalone order book, the breakup that you have given in the PPT, sector-wise, in the customer support and engineering services division, I see a on an average, every quarter, there is a 80 to 100 crore amount every quarter order book.

Raj Shah: Okay. When I see your standalone order book, the breakup that you have given on the PPT sector wise. In the Customer Support and Engineering Services division, I see on an average every quarter there is an INR 80 to INR 100 crore amount every quarter order book. In this quarter that order book has increased to INR 233 crore. Is there any significant large order that we have received? That's my question.

Speaker #4: But in this quarter, that order book has increased to ₹233 crore. So, is there any significant large order that we have received? That's my question.

Speaker #1: Yes, there were certain orders that we received. But I would not take that as a pattern, because it purely depends on the customer's requirement.

Rama Kirloskar: Yes, there were certain orders that we received. I would not take that as a pattern because it purely depends on the customer's requirement. I hope that answers your question.

Speaker #1: I hope that answers your question.

Speaker #4: Is that a fair assumption?

Raj Shah: Is there a fair assumption?

Speaker #1: I hope that answers your question. Am I audible?

Rama Kirloskar: I hope that answers your question. Am I audible?

Speaker #4: Yes, yes, you are. I said, as a follow-up, do you see that this shall help us improve our standalone EBITDA margins?

Raj Shah: Yes, you are.

Raj Shah: I said as a follow-up, do you see that this will help us improve our standalone EBITDA margins?

Speaker #1: Yes, definitely.

Rama Kirloskar: Yes, definitely.

Speaker #4: Got it. Lastly, on the oil and gas side, as the press release mentions, we have received a 5,000 petro pump order. So my question is, is this a repeat order from the previous customer, or have we been able to get entry into a new customer as well?

Raj Shah: Got it. Lastly, in the oil and gas side, as press release mentions, we have received a 5,000 petro pump order. My question was, is this a repeat order from the previous customer, or we have been able to get entry into a new customer as well?

Speaker #1: Yeah, so, you know, there are only three to four large PSUs that buy this, and we are qualified by all. So now, as of the end of Q1, we have around a booking of approximately ₹217 crore in this business.

Rama Kirloskar: Yeah. There are only three to four large PSUs that buy this, and we are qualified by all.

Rama Kirloskar: Now as of the end of Q1, we have around a booking of approximately INR 217 crores in this business.

Speaker #4: Okay, got it. I have a few. Thank you so much.

Alok Kirloskar: Okay. Got it. That's it. Thank you so much.

Speaker #1: Thank you. Thank you. The next question is from the line of Nirman from Unique PMS. Please proceed.

Rama Kirloskar: Yeah. Thank you.

Operator 2: Thank you. The next question is from the line of Nirman from Unique PMS. Please proceed.

Speaker #3: Yes. So my first question is on the standalone business. We've seen our sales growth picking up after a few quarters now. Do we see this momentum continuing and improving from here on?

[Analyst] (Unique PMS): My first question is on the standalone business. We've seen our sales growth picking up after a few quarters now. Do we see this momentum continuing and improving from here on, and as a result, will margins and operating leverage also kick in? Hello?

Speaker #3: And as a result, will margins and operating leverage also kick in? Hello?

Speaker #1: We just completed a huge foundry project, which we've come out of. So yes, that should enable higher revenues.

Rama Kirloskar: We just did a huge foundry project, which we've come out of. Yes, that should enable higher revenues.

Speaker #3: Okay. Secondly, on the order book breakup, we've given the split for the industry where our orders have come from—the pending order book has come. So, do we see any challenges on that side?

[Analyst] (Unique PMS): Okay. Secondly, on the order book breakup, we've given the split for industry where our pending order book has come. Do we see any challenges on that side?

Speaker #5: No, actually, it is in line with our annual operating plan for the quarter. And this was based on what we thought was going to be customers' orders—the orders that they would release.

Sanjay Kirloskar: No. Actually, it is in line with our annual operating plan for the quarter. This was based on what we thought were going to be customers' orders, the orders that they would release. This is why I've always said, don't look at our business quarter to quarter. Look at it at least half-yearly or better yet, annually, then you will see the difference. These are capital goods that we supply, and sometimes the orders get delayed, and sometimes they all come in a rush. This is as per what we expected it to happen.

Speaker #5: So this is why I've always said, don't look at our business quarter to quarter. Look at it at least half-yearly, or better yet, annually.

Speaker #5: Then you will see the difference because these are capital goods that we supply, and sometimes the orders get delayed. And sometimes they all come in a rush.

Speaker #5: But this is as per what we expected to happen.

Speaker #3: Okay. I'll take one question on the international business. We've seen top line growth, but margins have been impacted, as you mentioned, because of SPP UK.

[Analyst] (Unique PMS): Okay. Alok, one question on the international business. We've seen top line growth, but margins have impacted, as you mentioned, because of SPP UK. Given the increased traction in the US business and UK coming back, do we see double-digit growth and margins improving from here on?

Speaker #3: But given the increased traction in the US business and the UK coming back, we see double-digit growth and margins improving from here on.

Speaker #4: Yes, I mean, I mentioned that earlier too, Mr. Goel. You know, one is that we expect the service business to sort of come back in based on our order book in the last two quarters for them and the last three quarters for us here—because, as you know, they are one quarter off because their calendar year and financial year are the same.

Alok Kirloskar: Yes. I mentioned that earlier to Mr. Goel that one is that we expect the service business to sort of come back in based on our order book in the last two quarters for them and the last three quarters for us here, because as you know, they're one quarter off because their calendar year and financial year is the same. The second point, I think, is at overall level that as the execution of orders takes place in Thailand and in the Netherlands, because they're a little bit delayed on order execution, then those numbers also should get better.

Speaker #4: And the second point, I think, is that overall level, you know, as the execution of orders takes place in Thailand and in the Netherlands, you know, because they're a little bit delayed on order execution.

Speaker #4: Then, you know, those numbers should also get better.

Speaker #3: Sure. Thank you, and all the best.

[Analyst] (Unique PMS): Sure. Thank you, and all the best.

Speaker #5: Thank you.

Sanjay Kirloskar: Thank you.

Speaker #1: Thank you. The next question is from the line of Balla Subramaniam from Ariane Capital. Please proceed.

Operator 2: Thank you. The next question is from the line of Bala Subramaniam from Aryan Capital. Please proceed.

Speaker #4: Good afternoon. Good afternoon. Thank you so much for the opportunity. Sir, under US business data center, data center share is around 25%. So I'm trying to understand, like, which are the products we are supplying for data centers.

Bala Subramaniam: Good afternoon. Thank you so much for the opportunity. Sir, under US business data center share, it is around 23%. I am trying to understand which are the products we are supplying for data centers. In the US, around 4,000 data centers are operating, and I think another 2,000 is coming up. How do you plan to scale from 46 distributors to capture a large share in the market? If you could talk about the specific addressable market for your specific pump solutions for a data center, and how does that compare to your current average ticket size?

Speaker #4: And in the US, around 4,000 data centers are operating, and I think another 2,000 are coming up. Have you planned to scale from 46 distributors to capture your larger share in the market?

Speaker #4: And if you could talk about the specific addressable market for your specific pump solutions per data center, and how that compares to your current average ticket size?

Speaker #5: Market in the US has as you know, there are different players in the market. There are the operators. I'm just naming the operators. They are like people like Google or Amazon, you know, who have their own data centers.

Alok Kirloskar: Market in the US has, as you know, there are different players in the market. There are the operators. I am just naming the operators. They are people like Google or Amazon, who have their own data centers. Then there are private equities, as an example, Brookfield, let us say, who puts up data centers and other companies hire space or cook out their data center for a 20-year period, and these companies basically make a utility style cash flow. Then there are other sort of versions of how these work, in terms of data center size, scale, et cetera. Usually our target market is hyperscale data centers. Hyperscale data centers require different packages. One is the intake water package, which gets the water to the data center.

Speaker #5: Then, there are private equities as an example—Brookfield, let's say—who, you know, put up data centers, and other companies, you know, hire space or, you know, book out the data center for a 20-year period. And these companies basically make a utility-style cash flow.

Speaker #5: And then there are other sorts of versions of how these work, you know, in terms of data center size, scale, etc. So usually our target market is hyperscale data centers.

Speaker #5: Hyperscale data centers require different packages. One is the intake water package, which gets the water to the data center. From there, there is usually a treatment facility.

Alok Kirloskar: From there is a treatment facility usually, that requires some pumps, not usually bought by the data center, but bought by the person or the company that makes the treatment facility. After that are the main pumps of the data centers, which is the cooling pumps, the firefighting pumps, and the booster pumps. There is another system called on-chip cooling, which we do not do, but our booster pump sends the water as well as receives the water back. Sends the cold water to the on-chip cooling system and receives the warm water back from the on-chip cooling system and sends it to the chiller. I would say this is the overall package. We do not sell just the pumps as you know anymore.

Speaker #5: And that requires some pumps, not usually bought by the data center, but bought by the person or the company that makes the treatment facility.

Speaker #5: And after that are the main pumps to the data centers, which are the cooling pumps, the firefighting pumps, and the booster pumps. There is another system called on-chip cooling, which we don't do, but our booster pump sends the water, as well as receives the water back—it sends the cold water to the on-chip cooling system and receives the warm water back from the on-chip cooling system.

Speaker #5: And sends it to the chiller. So, I would say this is the overall package. We don't sell just the pumps, as you know, anymore.

Speaker #5: We sell modular systems that are in a container—plug and play—along with the piping and the control systems, everything. For the fire as well as the chiller system, as well as the pumps to the chiller systems, as well as the booster package.

Alok Kirloskar: We sell modular systems that are in a container, plug and play, along with the piping and the control systems, everything for the fire as well as the chiller system, as well as the pumps for the chiller systems, as well as the booster package. That is usually what we supply. In the past, we used to say that about 1% to 1.5% of any CapEx really has pumps, relevant CapEx, if you talk about power plants or whatever else, and that was also the case of data centers. Now, usually the data center package for a hyperscale data center, excluding the intake water system, is between $7.5 to $10 million. Sometimes it will go to $12 million, but this is the usual kind of package that is there. The intake water system changes because that is really dependent on what type of water you are pumping.

Speaker #5: So that's usually what we what we supply. You know, in the past, we used to say that about one to one and a half percent of any capex really has pumps relevant capex.

Speaker #5: You know, if you talk about power plants or whatever else. And that was also the case of data centers. But now, you know, usually the data center package for a hyperscale data center excluding excluding the intake water system, is between seven and a half to ten million dollars.

Speaker #5: Sometimes it will go to $12 million. But this is the usual kind of package that is there. The intake water system changes because that's really dependent on what type of water you're pumping.

Speaker #5: If you're pumping seawater, then the price is totally different from what it is for pumping river water or lake water, because, obviously, the corrosion and all those kinds of things.

Alok Kirloskar: If you're pumping seawater, the price is totally different from pumping river water or lake water, because obviously the corrosion and all those kinds of things. It's not worth me telling you a number because that number varies significantly based on what kind of media you're pumping in terms of water, whether it's saline or non-saline. I think that gives you a picture of what is happening. I think the question was how many data centers. I have mentioned it in the past, I think there are approximately 4,000 odd operating data centers in the US, and there are another currently 2,000 data centers that have received planning permission, which includes power and water in the US. From that point of view, there's a good opportunity.

Speaker #5: So, you know, it's not worth me telling you a number, because that number varies significantly based on, you know, what kind of media you're pumping for in terms of water—whether it's saline or non-saline.

Speaker #5: So, I think that gives you a picture of what is happening. I think the question was, how many data centers? I believe I have mentioned it in the past, but I think there are approximately 4,000-odd operating data centers in the US.

Speaker #5: And there are another currently 2,000 data centers that have received planning permission, which includes power and water, in the US. So from that point of view, there's a good opportunity.

Speaker #5: To answer your other question about distributors, yes, we are taking on national distributors. But those are not necessarily connected to data centers, because data centers have, like I said, operators, financiers, private equity players, and all these have, you know, some key consultants.

Alok Kirloskar: To answer your other question about distributors, yes, we are taking on national distributors, those are not necessarily connected to data centers because data centers have, like I said, operators, financiers, private equity players, and all these have some key consultants. I'll just name one as an example. Let's say AECOM as an example. Really our work goes in working with the consultants as well as the end users to ensure they understand what we are supplying them and what is the specialty. As an example, hyperscale data centers claim anything from 99% uptime to 99.2% uptime, and usually this means in a whole year that there is a couple of hours between eight and nine hours of total downtime available for maintenance.

Speaker #5: I'll just name one as an example. Let's say AECOM as an example. So you know, really our work goes in working with the consultants as well as the end users to ensure they understand what we are supplying them.

Speaker #5: And what are the—what are the specialties? So, you know, as an example, hyperscale data centers claim anything from 99% uptime to 99.2% uptime.

Speaker #5: And usually, this means in a whole year that there are a couple of hours, between eight and nine hours, of total downtime available for maintenance.

Speaker #5: So in our case, you know, we have some specialized pumps where maintenance can be done from the outside. And this obviously saves time for the pumps, you know.

Alok Kirloskar: In our case, we have some specialized pumps where maintenance can be done from the outside, and this obviously saves time for the pumps. Key items of the pump can be replaced and upgraded from the outside. These kinds of things are what an operator or a consultant would appreciate, it's not something a contractor would appreciate if you see the difference. I would say definitely we are working to grow the distribution channel, that's not necessarily connected to our data center business. I hope I've answered all the questions you asked.

Speaker #5: So, key items of the pumps can be replaced and upgraded from the outside. These kinds of things are what, you know, an operator or a consultant would appreciate.

Speaker #5: But it's not something a contractor would appreciate if you see the difference. So I would say, definitely, we are working to grow the distribution channel, but that's not necessarily connected to our data center business.

Speaker #5: I hope I've answered all the questions you asked.

Speaker #4: Yes, sir. My next question: the subsidiary KPML, I think it mainly deals with stampings, motors, and castings. I'm trying to understand the margin impact, from 12.5% to 7.3% in this quarter.

Bala Subramaniam: Yes, sir. My next question, the subsidiary KPML, I think it majorly deals with stampings, motors, and castings. I'm trying to understand the margin impact from 12.5% to 7.3% in this quarter. This impact because of the transition to EV or are there any other reasons? If you could mention demand for stampings, motors versus traditional ICE components.

Speaker #4: Is this impact because of the transition to EV, or are there any other reasons? And if you could mention demand for stampings, motors, and assets, which are traditional ICE components.

Speaker #5: Yeah, so KPML—you know, many times we've had questions as to why we have so many subsidiaries. Internationally, we are structured just like our major competitors around the world, because almost every country demands that there be a local company doing business in that country.

Sanjay Kirloskar: Yeah. KPML, many times we've had questions as to why we have so many subsidiaries, and internationally we are structured just like our major competitors around the world because almost every country demands that there be a local company doing business in that country. Domestically, we had two subsidiaries and two joint ventures. The joint ventures being Kirloskar Corrocoat and Kirloskar Ebara, the two subsidiaries being Kolhapur Steel and KPML. KPML makes stator, rotors, and motors for specialized applications, as well as motors that KBL uses in captive power plants, and PKSL makes steel castings for KBL as well as other customers. As you're aware, PKSL has been loss-making, but now they have started turning around the corner. The output has started increasing, we expect that PKSL will also be a profitable company going forward.

Speaker #5: Domestically, we had two subsidiaries and two joint ventures. The joint ventures being Kirloskar Korakote and Kirloskar Ibarra, and the two subsidiaries being Kolhapur Steel and KPML.

Speaker #5: KPML makes stators, rotors, and motors for specialized applications as well as motors that KBL uses in captive power plants. And PKSL makes steel castings for KBL as well as other customers.

Speaker #5: So, as you are aware, PKSL has been loss-making, but now they have started turning the corner. The output has started increasing, and we expect that PKSL will also be a profitable company going forward.

Speaker #5: Especially as requirements for power—whether thermal or nuclear—pumps are required, this is where steel castings and large steel castings are needed. So, as KBL builds on its order board and, given that BHEL is also a very large customer of PKSL, we expect that this company will grow going forward.

Sanjay Kirloskar: Especially as requirements for power, whether thermal or nuclear pumps are required, this is where steel castings and large steel castings are required. As KBL builds on its order board and the fact that BHEL is also a very large customer of PKSL, we expect that this company will grow going forward. At the moment, as you're aware, PKSL was making losses, the reason for the drop in margin at KPML has been that. We expect the margin to improve going forward.

Speaker #5: But at the moment, as you're aware, PKSL was making losses. The reason for the drop in margin at KPML has been explained, and we expect the margin to improve going forward.

Bala Subramaniam: Got it, sir. Thank you.

Speaker #5: Answered your question.

Sanjay Kirloskar: I hope that answers your question.

Speaker #4: Yes, sir. Got it. Thank you.

Bala Subramaniam: Yes, sir. Got it. Thank you.

Speaker #5: Thank you.

Sanjay Kirloskar: Thank you.

Speaker #4: Thank you. The next question is from the line of Nishita from Shankalesh, from Sapphire Capital. Please proceed.

Operator 2: Thank you. The next question is on the line of Nishita from Shankulesh from Savaya Capital. Please proceed.

Speaker #6: Yes. Am I audible?

Nishita from Shankulesh: Yes. Am I audible?

Speaker #5: Yeah.

Bhavesh Chheda: Yeah.

Speaker #6: Yeah, so I just wanted to understand, why have our margins on a consolidated basis fallen so much in Q1? Like, from 13% in Q4 to 10%—that's a 3% margin drop.

Nishita from Shankulesh: Yeah. I just wanted to understand why has our margins on a consolidated basis fallen so much in Q1, from 13% in Q4 to 10%? It's a 3% margin drop. Just wanted to understand the reason for that. Hello?

Speaker #6: So, I just wanted to understand the reason for that. Hello.

Speaker #5: Can you repeat your question?

Bhavesh Chheda: Can you repeat your question please?

Nishita from Shankulesh: Hello.

Bhavesh Chheda: Question is, why has there been a margin drop?

Speaker #6: Hello.

Speaker #5: Has there been a margin drop in the consolidated order book? In the consolidated order, as Alok mentioned earlier, there's a slight drop in scale.

Nishita from Shankulesh: Yeah.

Sanjay Kirloskar: In the consolidated order book.

Bhavesh Chheda: In consolidated order, as Alok mentioned earlier, there is a little drop in the SPP UK business. Otherwise, the standalone profit is more than the last year. We took margin for the KBL was at 12.8% and currently at 13.7%. The drop is because of KBL, basically SPP UK business, and that's why the consolidated number are lower.

Speaker #5: SPV UK business. Otherwise, the standalone profit is more than last year. So the margin for KPL was 12.8%, and currently it is 13.7%.

Speaker #5: The drop is observed in the KPI UK business, and that's why the consolidated numbers are lower.

Nishita from Shankulesh: Okay. As you mentioned that we expect the services business to improve from Q2 for us, now we can expect the margins to improve as well, right?

Speaker #6: Okay, so as you mentioned, we expect the services business to improve from Q2 for us. So, now we can expect the margins to improve as well, right?

Speaker #5: Correct.

Bhavesh Chheda: Correct.

Speaker #6: Okay. And you mentioned that on a stand on a standalone business, we expect a double digit growth for the whole year. What is the revenue growth we expect on a consolidated basis for the full year?

Nishita from Shankulesh: Okay. You mentioned that on a standalone business, we expect a double-digit growth for the whole year. What is the revenue growth we expect on a consolidated basis for the full year?

Speaker #5: There, as we have mentioned, we will strive for double-digit growth.

Sanjay Kirloskar: There also, as we have mentioned, we will strive for double-digit growth.

Speaker #6: Okay, okay. Understood. That is excellent. Thank you.

Nishita from Shankulesh: Okay. Understood. That is it from me. Thank you.

Speaker #4: Thank you. The next question is from the line of Priyesh from Mahindra Mutual Fund. Please proceed.

Operator 2: Thank you. The next question is from the line of Priyesh from Mahindra Mutual Fund. Please proceed.

Speaker #6: Yeah, hi. Good afternoon. Thank you so much for the opportunity and the cooperation with such a good set of companies. Sir, just a couple of questions.

[Analyst] (Mahindra Mutual Fund): Yeah. Hi. Good afternoon. Thank you so much for the opportunity and congratulations for the good set of numbers. Just a couple of questions. First, on order booking domestic, which is around at INR 2,500 crore. How much it is executable in FY27?

Speaker #6: First, on the order booking domestic, which is around ₹2,500 crore. How much of that is executable in FY27?

Speaker #5: Almost two-thirds of this order board, we believe, we can execute in this year. However, I'd like to tell you that this does not reflect the retail sectors—the small pump business order board—because there is no order board.

Sanjay Kirloskar: Almost two-thirds of this order book we believe we can execute in this year. However, I'd like to tell you that this does not reflect the retail sectors, the small pump business order book, because there is no order board. Everything that is ordered is delivered in the same month, and that is approximately 45% to 50% of our business.

Speaker #5: Everything that is ordered is delivered in the same month, and that is approximately 45% to 50% of our business.

Speaker #6: All the standalone business. Okay. Okay. And sir, another question with respect to if you look at standalone gross margin: your revenue has declined by around 26% quarter-on-quarter, but your gross margin has improved.

[Analyst] (Mahindra Mutual Fund): Only standalone business. Okay. Sir, another question with respect to if you look at standalone gross margin, your revenue has been declined by around 26% quarter-on-quarter, your gross margin has improved. Is it just because of the product mix, or how do I interpret this thing?

Speaker #6: Is it just because of the product mix, or how should I interpret this?

Speaker #2: Yes, it is essentially the product mix that has changed, and the price rise that has been implemented.

Rama Kirloskar: Yes, it is essentially the product mix, and the price rise that has been done.

Speaker #6: Okay. How much price rise have we taken, let's say, since January?

[Analyst] (Mahindra Mutual Fund): Okay. How much price hikes we have taken, let's say, since January?

Speaker #2: 10% approximately.

Rama Kirloskar: 10%, approximately.

Speaker #6: And is it sufficient to actually cover up, let's say, the raw material cost which we have seen in the last six months or so?

[Analyst] (Mahindra Mutual Fund): Is it sufficient to actually cover up the, let's say, your raw material cost, which we have seen in last 6 months or so?

Speaker #2: Yes, we believe that will be sufficient.

Rama Kirloskar: Yes, we believe that will be sufficient.

Speaker #6: Okay. And another question, also on power order book, which has grown by 30%. And we have also spoken about the nuclear opportunity a couple of times now.

[Analyst] (Mahindra Mutual Fund): Okay. Another question also on power order book, which has grown by 30%, and we have also spoken about nuclear opportunity for a couple of times now. Of the, let's say, INR 600 crores of order book, how much it is related to nuclear as of now? If any, then which segment is actually driving this growth in the power order book?

Speaker #6: Of the, let's say, ₹600 crore of order book, how much is related to nuclear as of now? And if not, if any, then which segment is actually driving this growth?

Speaker #6: In the power order book.

Speaker #5: So you know, the exact number I will not be able to give you, but I would say that possibly most—a large portion of that—would be nuclear.

Sanjay Kirloskar: The exact number I will not be able to give you, but I would say that possibly a large portion of that would be nuclear. As you're aware, we have also received orders for primary circuit pumps already, close to about INR 70 crores in Q1, and we expect some more orders. In the secondary circuit also, we've received almost INR 40 crores worth of orders for nuclear power plants. There is a pending order board of nuclear pumps. On the other hand, we are supplying to some of the new thermal power plants that are coming up. I think one large order was also mentioned in there.

Speaker #5: As you're aware, we have also received orders for primary circuit pumps already—close to about ₹70 crores in the first quarter. And we expect some more orders.

Speaker #5: In the secondary circuit also, we've received almost ₹40 crore worth of orders for nuclear power plants. So, there is a pending order board of nuclear pumps.

Speaker #5: And on the other hand, we are supplying to some of the new thermal power plants that are coming up. I think one large order was also mentioned in there.

Speaker #6: Okay, sir. Thank you. Thank you so much. I'll get back to you.

[Analyst] (Mahindra Mutual Fund): Okay, sir. Thank you. Thank you so much. I'll get back in the queue.

Speaker #4: Thank you. The next question is from the line of Rehan Sayer from Srinivira Asset Managers. Please proceed.

Operator 2: Thank you. The next question is from the line of Rehan Syed from Sun Life Asset Management. Please proceed.

Speaker #6: Okay. Good afternoon, sir, and thanks for taking my question. I just want one clarification regarding your segment-wise business. So, sir, if we look beyond FY27, I want to understand your view on which business vertical—like power, water, marine, and defense, since we have multiple segments—will be the key driver.

Rehan Syed: Yeah. Good afternoon to the team, and thanks for taking my question. Just I want one clarification regarding your segment-wise business. Sir, if you look beyond FY27, I just want to understand what's your view, which business vertical, like power, water, marine, and defense. We have multiple segments. As per your understanding, which segment is expected to deliver the highest incremental growth on EBITDA, on EBIT level? Yeah, this was my question, sir. What was the reasoning behind it?

Speaker #6: So, as per your understanding, which segment is expected to deliver the highest incremental growth at the EBITDA or EBIT level? Yeah, so this was my question, sir.

Speaker #6: And what was the reasoning behind it?

Speaker #5: What are the?

Sanjay Kirloskar: What are the?

Speaker #6: And, like, what was the reason? Growth, or growth?

Rehan Syed: Like what was the reason for growth?

Speaker #5: What is the reason?

Sanjay Kirloskar: What is the reason?

Speaker #6: Oh, yeah.

Rehan Syed: Yeah.

Speaker #5: I think power will grow—power, oil and gas, marine and defense, and building and construction—thanks to urbanization and if the data center opportunity grows in India.

Sanjay Kirloskar: I think power will grow. Power, oil and gas, marine and defense, and building and construction, thanks to urbanization and if the data center opportunity grows in India, I think these will be the areas where we will see growth. These will be the main growth drivers in India, to my mind.

Speaker #5: I think these will be the areas where we will see growth within it. These will be the main growth drivers in India, to my mind.

Speaker #6: Okay. And so, is there any target or benchmark we are keeping in mind for EBITDA margin or EBIT margin that we are targeting?

Rehan Syed: Okay. Sir, is there any target or benchmark we are keeping in mind for EBITDA margin or EBIT margin we are targeting?

Speaker #5: You know, as I've always said, we will strive for double-digit growth year on year.

Sanjay Kirloskar: You know, we will, as I've always said, we will strive for double-digit growth year on year.

Speaker #6: Oh, okay. Okay.

Rehan Syed: Oh, okay. Thank you.

Speaker #4: Thank you. Before we take the next question, we would like to remind participants that you will need to press star and one to ask a question.

Operator 2: Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. Participants who wishes to ask a question, you may press star and one now. The next question is on the line of Manish Goel from ThinkWise Wealth Advisors. Please proceed.

Speaker #4: Participants who wish to ask a question may press star and one now. The next question is from the line of Manish Quill from Syncwise Advisors.

Speaker #4: Please proceed.

Speaker #6: Oh, yeah. Thanks, sir, for another opportunity. So, question for Rama: You mentioned that for petrol pumps, till date, we have received orders of ₹217 crore.

Manish Goel: Yeah. Thanks for another opportunity. Question for Rama. You mentioned that for petro pumps, till date, we have received orders of INR 217 crores. Is it 17,000 plus 5,000, so 22,000 pumps are you referring to?

Speaker #6: So is it 17,000 plus 5,000, so 23,000—22,000 pumps you are referring to?

Speaker #2: Absolutely.

Rama Kirloskar: Approximately.

Speaker #6: Hello. Sorry. The voice is very...

Manish Goel: Hello. Sorry.

Speaker #2: It would be an approximate figure, Mr. Goel. I don't have the volume with me just now, but yes, that's approximately what it will be.

Rama Kirloskar: It would be approximate figure, Mr. Goel.

Manish Goel: Yeah.

Rama Kirloskar: I don't have the volume with me just now. Yeah, that's approximately what it will be.

Speaker #6: Okay. So, these order bookings are all the orders put together till date.

Manish Goel: Okay. This order booking is all the orders put together till date.

Speaker #2: Aha. Until until Q1 end.

Rama Kirloskar: Yes, until Q1 end.

Speaker #6: Correct. And how much of the last large order that we received would have been executed? Because when I look at your oil and gas order book, it is roughly ₹150 crore.

Manish Goel: Correct. How much of the last year large order what we received would have got executed? When I look at your oil and gas order book, it is roughly INR 150 odd crores. I'm just wondering that definitely out of the first order, large part would have got executed?

Speaker #6: So, I'm just wondering—out of the first order, a large part would have definitely got executed?

Speaker #2: Yes, we executed a bit of it last year. We did around ₹74 crore dispatch from this entire quantum.

Rama Kirloskar: Yes, we executed a bit of it last year. We did around INR 74 crores dispatch from this entire quantum.

Speaker #6: Okay. Okay. Okay. And the rest of it should be done in the current year?

Manish Goel: Okay.

Rama Kirloskar: Yeah.

Manish Goel: Rest of it should be done in the current year?

Speaker #2: But you know what happens? We can dispatch it sometimes to the end customer; we actually dispatch based on when the end customer wants it.

Rama Kirloskar: You know what happens, we can dispatch it. Sometimes we actually dispatch on the basis when the end customer wants it. As for the timeline, we can do it within the year, subject to the end customer accepting it.

Speaker #2: So, as per the timeline, we can do it within the year, subject to the end customer accepting it.

Speaker #6: Sure. And also, one more observation: the industry-related order book has declined significantly this quarter. We have probably been seeing a downward trend for quite a long time.

Manish Goel: Sure. Also one more observation that industry-related order book has declined significantly this quarter. It has been probably we are seeing a downward trend for quite a long time. What could be the reason and how should we look at going forward?

Speaker #6: So, what could be the reason, and how should we look at this going forward?

Speaker #5: There is a—besides the industry order, what you see, what you are looking at is 556 million. Actually, it is a wrong trade. Actually, the order book is 14.97 million.

Sanjay Kirloskar: Besides the industry order, what you are looking is INR 556 million. Actually it is a wrong figure. Actual order book is INR 1,497 million. The marine defense is INR 556 million.

Speaker #5: And the Marine Defense is 556.

Speaker #6: Can you—sorry, could you repeat? What is the actual order book?

Manish Goel: Can you, sorry, repeat? What is the actual order book?

Speaker #5: No, no. The industry order book—you said it has declined. Actually, the number 556 pertains to marine and defense, and the industry order book is 1,497.

Sanjay Kirloskar: No. The industry order book, you said it is declined. Actually, the number 556 is pertaining to marine and defense.

Manish Goel: Oh.

Sanjay Kirloskar: The industry order book is 1497.

Speaker #6: 14,97. Oh, okay.

Manish Goel: 1497. Oh, okay.

Speaker #5: It got switched in this thing.

Rehan Syed: It got switched in the thing.

Speaker #6: Okay, okay. Okay, sure, sir. And the marine—and okay, so this number has declined. Okay, so sir, as you were mentioning, Mr. Sanjay Kirloskar, in terms of the going forward, order inflow should be very strong from oil and gas, thermal, marine, and defense.

Manish Goel: Okay. Okay. Sure, sir. Okay, this number has declined. Okay. Sir, as you were mentioning, Mr. Sanjay Kirloskar, in terms of the going forward order inflow should be very strong from oil and gas, thermal, marine, and defense. Ideally, would it mean that this would lead to higher revenue contribution from the engineered pumps and probably help us improve our overall margin profile and-

Speaker #6: So ideally, would it mean that this would lead to higher revenue contribution from the engineered pumps and probably help us improve our overall margin profile, and it could be sustainable going forward?

Sanjay Kirloskar: Yes

Manish Goel: it could be sustainable going forward?

Speaker #5: Yes, this would help the Kirloskar Body factory because some of these orders would come in large pumps and some of these orders would come under large, small, and medium pumps.

Sanjay Kirloskar: Yes. This would help the Kirloskar Brothers Limited, because some of these orders would come in large pumps and some of these orders would come under small and medium pumps. As you're aware, the numbers now from the foundry are improving significantly, and we expect that our orders will be executed much faster than we were executing them earlier.

Speaker #5: So, as you're aware, the numbers now from the foundry are improving significantly, and we expect that our orders will be executed much faster than we were executing them earlier.

Speaker #6: Okay. Okay. Okay. Okay. So, ideally, what I probably missed in the first round of my question was—so, as you are alluding to double-digit growth, now onwards we should probably see better execution and double-digit growth.

Manish Goel: Okay. Ideally what I probably missed in the first round of my question was, as you are alluding to double-digit growth, now onward we should probably see a better execution and double-digit growth. On the margin-

Speaker #6: And and on the margin.

Speaker #5: Unfortunately, I think the orders will also come in better now, especially power, building and construction, I think. Oil and gas as well. We expect that orders will come in faster.

Sanjay Kirloskar: Fortunately, I think the orders will also come in better now, especially power, building, and construction, I think. Oil and gas as well, we expect that orders will come in faster.

Speaker #6: Okay.

Manish Goel: Okay.

Speaker #5: Marine and defense, I wouldn't say, because that depends a lot on budgets approved by the government and then the rate at which the companies that are building ships, the rate at which they place orders.

Sanjay Kirloskar: Marine and defense, I wouldn't say, because that depends a lot on budgets approved by the government, then the rate at which the companies that are building ships, the rate at which they place orders.

Speaker #6: Sure, sure. And how would the pipeline be in thermal power? Last year, the annual report says we received order inflow of ₹228 crore. So, can we receive much higher than that in the current year?

Manish Goel: Sure. How would be the pipeline in thermal power? Like last year's annual report says we received order inflow of INR 228 crores. Can we receive much higher than that in current year? Number one. Number two, related question, are we probably dominant player for concrete volute pumps for water intake for these thermal power plants, sir?

Speaker #6: Number one. And number two, a related question: are we the dominant player for concrete volume pumps for water intake for these thermal power plants?

Speaker #5: I think now we are the world's largest manufacturer of concrete volume pumps. We've made more than anyone else in the world. And we are one company—you know, we believe that the concrete volume pump is far better for our end customer.

Sanjay Kirloskar: I think now we are the world's largest manufacturers of concrete volute pumps. We've made more than anyone else in the world. We are one company, we believe that concrete volute pumps is far better for our end customer on the lowest lifecycle cost basis. That's why we promote concrete volute pumps over vertical turbine pumps that need a lot of spare parts. Concrete volute pumps, the ones that we supplied our first supply in 1994, you'll be happy to note that the efficiency had dropped by only 2% in 30 years compared to normal pumps losing 1 to 1.5 percentage points per year. This, when it's pumping seawater twenty-four seven. Also, the spare cartridge. They asked for a spare cartridge to be supplied along with the original pump. That spare cartridge is still lying there.

Speaker #5: On a lowest lifecycle cost basis, that's why we promote concrete volute pumps over vertical turbine pumps that need a lot of spare parts.

Speaker #5: Concrete volume pumps the ones that we supplied our first supply in 1994 you'll be happy to note that the efficiency had dropped by only 2% in 30 years compared to normal pumps losing 1 to 1 and a half percentage points per year.

Speaker #5: And this when it's pumping seawater 24/7. Also, the spare cartridge—you know, they asked for a spare cartridge to be supplied along with the original pumps.

Speaker #5: That spare cartridge is still lying there. So it is our belief that customers who understand the lifecycle cost are not so worried about being L1, you know, and see the value of concrete volume pumps will go for concrete volume pumps.

Sanjay Kirloskar: It is our belief that customers who understand the lifecycle costs are not so worried about being L1, and see the value of concrete volute pump will go for concrete volute pumps. We are hopeful that the new plants that will be ordered in the coming years will also have concrete volute pumps based on their inherent performance. It depends on when they place the order. For nuclear power plants, currently they're asking for metallic volute pumps, where instead of a concrete casing, they have a sheet metal casing, and there also, I believe we have 100% market share at the moment.

Speaker #5: We are hopeful that the new plants that will be ordered in the coming years will also have concrete volume pumps, based on their inherent performance.

Speaker #5: But it depends on when they place the order. For nuclear power plants, currently they're asking for metallic volute pumps, where instead of a concrete casing, they have a sheet metal casing.

Speaker #5: And also, I believe we have a 100% market share at the moment.

Speaker #6: Okay. Sir, how is the progress on the development order for the primary circuit for the fleet ordering, sir? Where have we reached, sir?

Manish Goel: Okay. Sir, how is the progress on the development order for the primary circuit for the fleet ordering, sir? Where have we reached, sir?

Speaker #5: Where can an order be placed?

Sanjay Kirloskar: Where an order can be placed?

Speaker #6: No, sorry. No, sorry. Your voice was not.

Manish Goel: No, sorry.

Speaker #5: I said we've reached very close to when an order can be placed after the tender comes.

Sanjay Kirloskar: I said we've reached very close to when an order can be placed after the tender comes.

Speaker #6: Okay, so will you be able to participate in the current tender process, basically?

Manish Goel: Okay. Will you be able to participate in the current tender of total capacity?

Sanjay Kirloskar: Yeah.

Manish Goel: Okay.

Speaker #5: Yeah. Yeah.

Sanjay Kirloskar: Yeah. What has happened is, we have proved the hydraulic performance is far superior to what we had promised. Mechanically also, we've proved the pump. Metallurgically, we had some hiccups because we couldn't get it made in India. Since these are civilian nuclear power plants, there is nothing stopping us from imports. What we've done is, we expect that we will get orders, and therefore we have a company, a foundry in Europe, as well as another foundry in India, making all the trials so that metallurgically also it will be proved. We expect that by the middle of the month or by the end of the month, everything will be proved.

Speaker #6: My buzz, sir. Okay. Okay. Okay.

Speaker #5: Yeah. Because what has happened is, you know, we have proved the hydraulic performance—it's far superior to what we had promised. Mechanically also, we've proved the pumps.

Speaker #5: Metallurgically, we had some hiccups because we couldn't get it made in India, but since these are civilian nuclear power plants, there is nothing stopping us from imports.

Speaker #5: So what we've done is, we expect that we will get orders, and therefore we have a company foundry in Europe as well as another foundry in India making all the trials, so that metallurgically also it will be proved.

Speaker #5: We expect that whether we buy in the middle of the month or by the end of the month, everything will be approved.

Speaker #6: Okay, okay. Thank you so much, sir. Thanks a lot.

Manish Goel: Okay. Thank you so much, sir. Thanks a lot.

Speaker #1: Thank you. Before we take the next question, we would like to remind participants that you may press star one to ask a question.

Operator 2: Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Himanshu Upadhyay from Speed Report. Please proceed.

Speaker #1: The next question is from the line of Himanshu Upade from Suite 4. Please proceed.

Speaker #6: Yeah. Hi, good afternoon. My question is to Rama. Rama Kirloskar, we heard that in the JV Ibara last year, the revenues fell quite significantly, and which is also in industrial and power and some of those segments.

Himanshu Upadhyay: Yeah, hi. Good afternoon. My question is to Rama. Rama Kirloskar, we have that JV, Ebara, where last year the revenues fell quite significantly, and which is also in industrial and power and some of those segments. What is the outlook on that company, and how are you looking about that company moving in, let's say, one or two years ahead? Hello? Hello?

Speaker #6: What is the outlook on that company, and how are you looking at that company moving in, let's say, one or two years ahead? Hello.

Speaker #6: Hello.

Speaker #2: Am I audible? Hello.

Rama Kirloskar: Am I audible? Hello.

Speaker #6: Yeah. Now you are audible.

Himanshu Upadhyay: Yeah, now you are audible.

Speaker #1: Yes.

Operator 2: Yes.

Rama Kirloskar: As far as last year is concerned, one of our large packages, we were not able to dispatch because the customer did not want that package at that point in time. That was the first case for a domestic order. There were some international orders that got hampered because we couldn't ship them. They will go out, and they've gone out in Q1. I don't see that as a long-term issue. As far as booking is concerned, we see significant growth and export opportunities coming from the Gulf as well as from Africa. We are quite hopeful to see that double-digit growth there, both in booking and in revenue.

Speaker #2: Yeah. So, as far as last year is concerned, one of our large packages we were not able to dispatch because the customer did not want that package at that point in time.

Speaker #2: That was the first case, for a domestic order. Then there were some international orders that got hampered because we couldn't ship them, but they will go out. They've now gone out in Q1.

Speaker #2: So, I don't see that as a long-term issue. As far as booking is concerned, we see significant growth and export opportunities coming from the Gulf, as well as from Africa.

Speaker #2: So, we are quite hopeful to see double-digit growth there, both in booking and in revenue.

Speaker #6: Okay. And secondly, we have focused on—in our presentation also, we gave certain slides on the subscription platform and all those things. In that, we have said that IoT is an important pillar for us for growth. How is the progress on the industrial side in domestic markets?

Himanshu Upadhyay: Secondly, we have focused on, in our presentation also, we gave certain slides on subscription platform and all those things. We have said that IoT is an important pillar for us for growth. How is the progress on industrial side in domestic markets? Let's say, what is your thought process from here on how big can it be? Some thoughts on that business will help us all. Scaling up or it is not scaling.

Speaker #6: And let's say, what is your thought process from here? How big can it be? And some thoughts on that business would help us—whether it is scaling up or it is not scaling.

Speaker #2: No. So we do see we do see an order board in industrial so now we're coming back to KBL. And one of the reasons why our our revenue took you know did not seem seem flat this time for industrial is because of our foundry modernization program that did affect some of our dispatches.

Rama Kirloskar: We do see an order board in industrial. Now we're coming back to KBL. One of the reasons why our revenue seemed flat this time for industrial is because of our foundry modernization program that did affect some of our dispatches. We do see that picking up in Q2.

Speaker #2: But we do see that picking up in Q2.

Speaker #6: And as far as your question on IoT, I think it's going quite well. We've now made the second version. We made two versions. One is a very cheap version which can be used for lower-cost pumps.

Sanjay Kirloskar: As far as your question on IoT, I think it's going quite well. We've now made the second version. We've made two versions. One is a very cheap version, which can be used for lower cost pumps, and the other one is one which can be used with multiple pumps. The first part of IoT devices, each pump needed one device. Now we've made sure that more than one pump can go per device, theoretically reducing the cost for the customer for adoption. We are quite bullish about the future of this. It can be connected into other programs, we expect that customers will order this in larger numbers going forward.

Speaker #6: And the other one is one which can be used with multiple pumps. You know, the first lot of IoT devices, each pump needed one device.

Speaker #6: Now we've made sure that more than one pump can go per device, theoretically reducing the cost for the customer for adoption. So we are quite bullish about the future of this.

Speaker #6: It can be connected to other programs, and so we expect that customers will order this in larger numbers going forward.

Speaker #2: And other than critical sectors where you would expect such condition monitoring systems to be adopted, we also see significant traction in municipal water and irrigation projects.

Rama Kirloskar: Other than critical sectors where you would expect such condition monitoring systems to be adopted, we also see significant traction in municipal water and irrigation projects. They too are asking for these. A lot of times, the pump houses are in very remote areas where it's difficult to find skilled manpower for maintenance. We do see a lot of demand for these systems in those tenders as well.

Speaker #2: They too are asking for these systems. A lot of times, the pump houses are in very, very remote areas where it's difficult to find skilled manpower for maintenance.

Speaker #2: So we do see a lot of demand for these systems in those tenders as well.

Speaker #6: Okay. And how large would be our base, let's say, where we have applied IoT in the Indian market, and at what rate would that base be increasing, or something like that?

Himanshu Upadhyay: Okay. How large would be our base, let's say, where we have applied IoT in India market? At what rate-

Sanjay Kirloskar: It's in hundreds at the moment

Himanshu Upadhyay: the base will be increasing? Something like that.

Speaker #5: It's in the hundreds at the moment.

Sanjay Kirloskar: It's in hundreds at the moment.

Speaker #6: Okay. Okay. Okay. Thank you so much.

Himanshu Upadhyay: Okay. Thank you so much.

Speaker #5: Actually, we are the only ones who can supply this at the moment in India. When governments or customers come out with requirements, we are the only ones participating.

Sanjay Kirloskar: Actually, we are the only ones who can supply this at the moment in India. When governments come out or customers come out with requirements, we are the only ones participating.

Speaker #6: And is it helping us in our aftermarket business also? I mean,

Himanshu Upadhyay: Is it helping us in our aftermarket business also?

Speaker #5: Yes, because we are able to monitor the performance of the pumps.

Sanjay Kirloskar: Yeah, because we are able to monitor the performance of the pumps.

Speaker #6: And secondly, how on—let's say, we have that CHD or business, okay? And...

Himanshu Upadhyay: secondly, let's say we have that EHD or business, okay.

Rama Kirloskar: Can you speak up a little? You're very soft. Can you speak up a little bit? We can't hear you.

Speaker #2: Can you speak up? You're very soft. Can you speak up a little bit? We can't hear you.

Speaker #6: Okay. What I am saying is on customer support, okay? Though there is one large business that we have got this quarter, is it helping us in our customer support and ESG? And can we think that it can be a large chunk of, let's say, 10% of our order booking or revenue over a period of time, with high IoT and everything?

Himanshu Upadhyay: Okay. What I am saying is, on customer support, okay, though there is one large business what we have got this quarter, but is it helping us in our customer support and EHD and can we think it can be large chunk of, let's say, 10% of our order booking or revenue over a period of time with IoT and everything?

Speaker #6: Okay.

Rama Kirloskar: Yes, we do believe that that'll happen over time, but it will still take time. Specifically for critical applications, it does help us for customer support because it helps us to ensure that the customer has no downtime.

Speaker #2: Yes, we do believe that will happen over time, but it will still take time. Specifically for critical applications, it does help us for customer support because it helps us to ensure that the customer has no downtime.

Speaker #6: Okay. Okay. Thank you so much.

Himanshu Upadhyay: Okay. Thank you so much.

Speaker #2: Thank you. Thank you.

Rama Kirloskar: Thank you.

Speaker #1: Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question.

Operator 2: Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. To ask a question, you may press star and one now. The next question is on the line of Sakshi Pratap from Pratap Securities. Please proceed.

Speaker #1: To ask a question, you may press * and 1 now. The next question is on the line of Sakshi Pratap from Pratap Securities. Please proceed.

Speaker #7: Hi sir. Thanks for the opportunity. Sir, I had two questions. Firstly, finance cost and other expenses have increased by 31% and 21% respectively. Could you help us understand what factors led to this rise, and should we expect these levels to remain elevated over the coming quarters?

Sakshi Pratap: Hi, sir. Thanks for the opportunity. Sir, I had two questions. Firstly, finance costs and other expenses have increased by 31% and 21% respectively. Could you help us understand what factors led to this rise and should we expect these levels to remain elevated over the coming quarters?

Speaker #5: So, the other expenses increased on account of two things. One is the digitization expenses that we are undertaking, and the advertisement expenses that we are incurring.

Sanjay Kirloskar: The other expenses increases on account of two things. One is about the digitization expenses, what we are undertaking, and the advertisement expenses, what we are incurring.

Speaker #7: Okay, understood, sir. And secondly, what would be our planned capex for the entire year FY27, and also, if you can highlight where we would be using this for investment.

Sakshi Pratap: Okay. Understood, sir. Secondly, what would be our planned CapEx for the entire year, FY27? Also, if you can highlight where we would be using this for investment.

Speaker #5: Yeah. Normally, our capital expenditures are equal to depreciation, and they are mainly used for modernization, debottlenecking, and quality requirements, wherever they are.

Sanjay Kirloskar: Yeah. Normally, our capital expenditure is equal to depreciation, and it is mainly used for modernization, debottlenecking, and quality requirements wherever they are.

Speaker #7: Understood, sir. Thank you so much.

Sakshi Pratap: Understood, sir. Thank you so much.

Speaker #1: Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Bhavesh Cheda for the closing comments. Over to you, sir.

Operator 2: Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Bhavesh Chheda for the closing comments. Over to you, sir.

Speaker #6: We thank everyone for joining the call today. We hope we have been able to give you a detailed overview of our business and also answer your queries.

Bhavesh Chheda: We thank everyone for joining the call today. We hope we have been able to give you a detailed overview of our business and also answer your queries. Should you have any further queries or clarifications, please feel free to reach out to SGA, our investor relation advisors. Thank you once again for your continued trust and support. I wish everyone a very pleasant day.

Speaker #6: Should you have any further queries or require clarification, please feel free to reach out to SGA, our investor relations advisor. Thank you once again for your continued trust and support.

Speaker #6: And I wish everyone a very pleasant day.

Speaker #1: Thank you. On behalf of Kirloskar Brothers Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.

Operator 2: Thank you. On behalf of Kirloskar Brothers Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

Speaker #5: Thank you. Thank you.

Bhavesh Chheda: Thank you.

Himanshu Upadhyay: Thank you.

Rama Kirloskar: Thank you.

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