KIRLOSBROS - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | KIRLOSBROS | Market Cap | 12,660 Cr. | Current Price | 1,595 ₹ | High / Low | 2,476 ₹ |
| Stock P/E | 47.0 | Book Value | 233 ₹ | Dividend Yield | 0.44 % | ROCE | 20.8 % |
| ROE | 15.4 % | Face Value | 2.00 ₹ | DMA 50 | 1,634 ₹ | DMA 200 | 1,693 ₹ |
| Chg in FII Hold | 0.19 % | Chg in DII Hold | 0.06 % | PAT Qtr | 106 Cr. | PAT Prev Qtr | 78.2 Cr. |
| RSI | 44.3 | MACD | -9.47 | Volume | 35,936 | Avg Vol 1Wk | 46,220 |
| Low price | 1,333 ₹ | High price | 2,476 ₹ | PEG Ratio | 2.47 | Debt to equity | 0.02 |
| 52w Index | 22.9 % | Qtr Profit Var | 6.20 % | EPS | 30.1 ₹ | Industry PE | 40.0 |
📊 Financials: Kirloskar Brothers (KIRLOSBROS) demonstrates solid fundamentals with ROCE at 20.8% and ROE at 15.4%, reflecting efficient capital use. Debt-to-equity ratio of 0.02 indicates negligible leverage. EPS stands at ₹30.1, supported by PAT growth from ₹78.2 Cr. to ₹106 Cr. Quarterly profit variation (+6.20%) highlights steady earnings momentum. Dividend yield at 0.44% provides modest shareholder returns.
💹 Valuation: Current P/E of 47.0 is higher than the industry average of 40.0, suggesting premium valuation. P/B ratio (~6.8, 1595/233) reflects significant premium pricing relative to book value. PEG ratio of 2.47 indicates growth is overpriced. Intrinsic value analysis suggests the stock is richly valued, with limited margin of safety.
🏢 Business Model & Health: Kirloskar Brothers operates in pumps and fluid management solutions, with strong competitive advantage in industrial engineering, water management, and energy sectors. Low debt, consistent profitability, and strong ROCE support long-term sustainability. Institutional participation is positive, with FII holdings increasing (+0.19%) and DII holdings rising (+0.06%).
📈 Entry Zone: Technical indicators (RSI 44.3, MACD -9.47, DMA 50 at ₹1,634, DMA 200 at ₹1,693) suggest consolidation. Accumulation near ₹1,550–₹1,600 could be favorable. Long-term investors may hold, given strong fundamentals and sectoral growth outlook.
Positive
- ✅ Strong ROCE (20.8%) and ROE (15.4%) highlight efficient capital use.
- ✅ Debt-to-equity ratio (0.02) ensures financial stability.
- ✅ PAT growth (+6.20%) indicates earnings resilience.
- ✅ Institutional support with both FII (+0.19%) and DII (+0.06%) holdings increasing.
Limitation
- ⚠️ High P/E (47.0) compared to industry average (40.0) suggests overvaluation.
- ⚠️ P/B ratio (~6.8) reflects significant premium pricing.
- ⚠️ PEG ratio (2.47) indicates growth is overpriced.
Company Negative News
- 📉 Valuations remain stretched compared to intrinsic value.
- 📉 Earnings growth is modest relative to premium multiples.
Company Positive News
- 📈 PAT growth from ₹78.2 Cr. to ₹106 Cr. shows operational performance.
- 📈 Debt-free balance sheet ensures strong financial health.
- 📈 Institutional confidence reflected in rising FII and DII holdings.
Industry
- 🌐 Industry P/E at 40.0 indicates moderate sector valuations.
- 🌐 Pump and fluid management sector benefits from infrastructure and water management demand.
Conclusion
🔎 Kirloskar Brothers is fundamentally strong with efficient capital returns, low debt, and steady earnings growth. However, valuations are stretched with high P/E and PEG ratios. Entry near ₹1,550–₹1,600 offers a balanced risk-reward opportunity. Long-term holding is justified, though investors should monitor valuation risks and earnings consistency closely.