KIRLOSBROS - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

📊 Investment Analysis: Kirloskar Brothers Ltd. (₹1,938)

Investment Rating: 4.2

Kirloskar Brothers stands out as a well-run, low-leverage industrial play with strong return metrics and an attractive PEG ratio. While recent technicals suggest a pullback phase, the fundamentals paint a compelling picture for long-term accumulation.

🔧 Fundamental Breakdown

ROCE: 27.6%, ROE: 21.6%

🟢 Excellent capital efficiency — signals high-quality operations and profitable deployment.

Debt-to-Equity: 0.09

✅ Virtually debt-free — bolsters financial resilience during industry slowdowns.

PEG Ratio: 0.58

🔥 Attractive valuation relative to growth — implies significant upside potential.

EPS: ₹52.3, P/E: 37.4 vs Industry PE: 41.8

⚖️ Slightly cheaper than industry average — decent relative value in industrials.

Dividend Yield: 0.36%

🔸 Modest payout — primarily a capital appreciation play, with income as a bonus.

📉 Technical Snapshot

DMA 50: ₹2,019, DMA 200: ₹1,872

Trading below short-term average — mild weakness, but still above long-term support.

RSI: 38.2, MACD: -16.8

Entering oversold zone — signals potential bottoming out.

Volume: Above average

Elevated interest amid correction — accumulation may be underway.

🎯 Ideal Entry Price Zone

Accumulation Zone: ₹1,880–₹1,920

Close to DMA 200 and RSI base — may offer high reward-to-risk entry point.

Watch for

RSI rebounding toward 45+

MACD crossover confirmation

📆 Exit Strategy / Holding Period

If already invested

Holding Duration: 2–4 years

Suitable for wealth compounding in engineering and infrastructure recovery cycle.

Exit Range: ₹2,400–₹2,475

Near previous highs — consider trimming if valuations exceed fundamentals.

Re-evaluation Triggers

PEG ratio spikes above 1.2 without matching EPS growth

ROE drops below 15%

Profit margin erosion over two consecutive quarters

RSI breaks below 35 with falling volumes

🧭 Verdict

Kirloskar Brothers is a strong candidate for long-term investing, blending capital efficiency, clean balance sheet, and favorable valuation metrics. With industrial capex cycles turning and technicals approaching support zones, this one’s worth watching — or building into gradually.

Want me to pit it against Thermax or Triveni Turbine to see how it stacks up on engineering metrics? I can chart that out with precision.

Edit in a page