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KIRLOSBROS - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 3.6
📊 Financial Overview
- Profitability: PAT dropped from ₹100 Cr to ₹47 Cr QoQ, though YoY growth remains positive at 14.9%.
- Return Metrics: ROE at 15.8% and ROCE at 20.8% are solid, indicating efficient capital deployment.
- Valuation: P/E of 57.3 is significantly above the industry average (41.3), suggesting premium valuation.
- P/B Ratio: With a book value of ₹209 and price of ₹1,878, P/B is ~9.0, reflecting a steep premium.
- PEG Ratio: 1.50 indicates moderate overvaluation relative to growth.
- Debt Profile: Debt-to-equity ratio of 0.01 shows excellent financial discipline and near-zero leverage.
- Momentum: RSI at 39.4 and MACD at -18.5 suggest bearish sentiment and potential for technical correction.
🏢 Business Model & Competitive Edge
- Kirloskar Brothers is a leading engineering company specializing in fluid management solutions, including pumps and valves.
- Strong brand legacy, diversified industrial applications, and global presence offer resilience and scalability.
- Focus on infrastructure, water management, and energy sectors supports long-term demand visibility.
💡 Entry Zone Recommendation
- Current price is below both DMA 50 (₹1,965) and DMA 200 (₹1,914), indicating short-term weakness.
- Suggested Entry Zone: ₹1,800–₹1,850 for accumulation.
- Long-term holding is viable if earnings stabilize and valuation cools down.
✅ Positive
- Strong ROE and ROCE reflect operational efficiency.
- Debt-to-equity ratio of 0.01 enhances financial resilience.
- DII holdings increased by 0.11%, showing domestic investor confidence.
⚠️ Limitation
- High P/E and P/B ratios suggest valuation concerns.
- QoQ PAT decline may reflect margin pressure or project delays.
- PEG ratio above 1.0 indicates moderate overvaluation relative to growth.
📉 Company Negative News
- FII holdings declined by 0.26%, indicating cautious foreign sentiment.
- Stock has corrected ~24% from its 52-week high of ₹2,476.
📈 Company Positive News
- Strong brand equity and diversified industrial exposure.
- Stable EPS of ₹33.8 and improving demand in infrastructure and water management sectors.
🏭 Industry
- Engineering and industrial equipment sectors benefit from infrastructure push and industrial capex recovery.
- Industry P/E of 41.3 supports moderate valuation for quality players.
🧾 Conclusion
- Kirloskar Brothers is a fundamentally sound engineering firm with strong return metrics and minimal debt.
- Entry near ₹1,800–₹1,850 offers a reasonable long-term opportunity.
- Monitor earnings recovery and institutional flows for sustained performance.
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