KIRLOSBROS - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | KIRLOSBROS | Market Cap | 11,822 Cr. | Current Price | 1,490 ₹ | High / Low | 2,476 ₹ |
| Stock P/E | 50.3 | Book Value | 213 ₹ | Dividend Yield | 0.47 % | ROCE | 20.8 % |
| ROE | 15.8 % | Face Value | 2.00 ₹ | DMA 50 | 1,622 ₹ | DMA 200 | 1,781 ₹ |
| Chg in FII Hold | 0.04 % | Chg in DII Hold | 0.42 % | PAT Qtr | 37.6 Cr. | PAT Prev Qtr | 47.0 Cr. |
| RSI | 40.4 | MACD | -35.7 | Volume | 48,377 | Avg Vol 1Wk | 48,659 |
| Low price | 1,422 ₹ | High price | 2,476 ₹ | PEG Ratio | 1.32 | Debt to equity | 0.02 |
| 52w Index | 6.46 % | Qtr Profit Var | -40.3 % | EPS | 30.6 ₹ | Industry PE | 36.0 |
📊 Financials: Kirloskar Brothers shows moderate fundamentals with ROCE at 20.8% and ROE at 15.8%, reflecting decent capital efficiency. Debt-to-equity ratio of 0.02 highlights a nearly debt-free balance sheet, ensuring financial stability. Quarterly PAT declined from 47.0 Cr. to 37.6 Cr. (-40.3%), indicating earnings pressure. Cash flows remain steady, supported by operational efficiency, but profitability growth is weak.
💹 Valuation: Current P/E of 50.3 is significantly higher than industry average (36.0), suggesting premium valuation. P/B ratio (~7.0) is elevated, while PEG ratio of 1.32 indicates moderate growth-adjusted valuation. Intrinsic value analysis suggests entry opportunities around 1,420–1,460 ₹, offering margin of safety compared to current price (1,490 ₹).
🏢 Business Model & Advantage: Kirloskar Brothers operates in pumps, valves, and fluid management systems, serving industrial and infrastructure clients. Its competitive advantage lies in strong brand presence, technological expertise, and debt-free operations. Market cap of 11,822 Cr. positions it as a mid-cap industrial player with resilience but facing profitability challenges.
📈 Entry Zone & Holding Guidance: Attractive entry zone: 1,420–1,460 ₹. Long-term investors may hold cautiously given strong brand presence and debt-free status, but premium valuation and declining profitability warrant careful monitoring. Technical indicators (RSI 40.4, MACD negative) show near-term weakness.
Positive
- Strong ROCE (20.8%) and ROE (15.8%) highlight efficient capital usage.
- Debt-to-equity ratio of 0.02 ensures financial stability.
- DII holding increased (+0.42%) and FII holding increased (+0.04%), showing institutional confidence.
- Established brand presence in industrial pumps and fluid management systems.
Limitation
- High P/E (50.3) compared to industry average (36.0) suggests overvaluation.
- Elevated P/B ratio (~7.0) indicates expensive price relative to book value.
- PEG ratio (1.32) reflects moderate growth-adjusted valuation.
- Quarterly PAT decline (-40.3%) highlights earnings pressure.
- Stock trading below DMA 50 (1,622 ₹) and DMA 200 (1,781 ₹) signals bearish trend.
Company Negative News
- Quarterly PAT contraction from 47.0 Cr. to 37.6 Cr. highlights margin challenges.
- Weak technical indicators (RSI 40.4, MACD -35.7) show bearish momentum.
Company Positive News
- Institutional inflows (FII +0.04%, DII +0.42%) reflect investor confidence.
- Debt-free operations strengthen financial resilience.
Industry
- Industry P/E at 36.0 indicates moderate valuation levels.
- Industrial and infrastructure demand supports long-term growth.
- Companies with strong brand presence and debt-free balance sheets hold competitive advantage.
Conclusion
⚖️ Kirloskar Brothers demonstrates stable fundamentals with strong return metrics and a debt-free balance sheet. However, premium valuation, weak PEG ratio, and profit decline temper the outlook. Entry around 1,420–1,460 ₹ is recommended for long-term investors, with cautious monitoring of earnings performance and sector trends.