Kirloskar Pneumatic Company Limited (KPCL) has announced its financial results for the second quarter, revealing a decline in performance amid challenging market conditions. The company, a key player in the Air, Refrigeration & Gas Compression business in India, faced headwinds in its financial metrics.

Revenue and Profitability

KPCL reported quarterly revenue of 3.78 billion rupees, down from 4.30 billion rupees in the same period last year. The company's net profit decreased to 432.00 million rupees from 675.00 million rupees year-over-year.

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) fell to 581.00 million rupees compared to 936.00 million rupees previously. The EBITDA margin contracted to 15.37% from 21.73% in the corresponding quarter of the previous year.

Segment Performance and Order Book

The Compression business continues to be the primary revenue driver for KPCL. As of the latest available data, the company's order book stood at 1,667.00 crore rupees, showing a slight increase from 1,624.00 crore rupees at the beginning of the year.

Key Developments

1. Product Milestones: The Tezcatlipoca centrifugal compressor has crossed the 100-unit mark, and the Tyche semi-hermetic compressor has been successfully launched after clearing all product and field testing.

2. New Venture: The Board has approved filing a Production Linked Incentive Scheme application to enter the Commercial Air conditioning space, which has a market size exceeding 5,000.00 crore rupees. The company plans to set up this project in the next 18 months, subject to approvals.

3. Equity Share Allotment: KPCL allotted 17,700 equity shares under its ESOS 2019 scheme, with 1,600 shares allotted on September 15, 2025, and listed on October 1, 2025.

Outlook

Despite the current challenges reflected in the Q2 results, KPCL remains focused on innovation and expansion. The company's efforts in commercializing its intellectual property and leveraging new manufacturing capabilities may yield positive results in the coming quarters. The planned entry into the Commercial Air conditioning space, subject to approvals, could open up significant growth opportunities for KPCL in the future.

Investors and stakeholders will be watching closely to see how these initiatives translate into financial performance in the subsequent quarters, especially given the current market dynamics and challenges faced by the company.

Kirloskar Pneumatic Company reported flat sales of Rs 272.00 crores in Q1, matching the previous year's levels. Despite facing challenges, the company's management remains confident about achieving its Rs 2,000.00 crore revenue target for the year.

Challenges and Optimism

The company encountered several hurdles during the quarter, including:

• Global economic uncertainty
• Delayed order finalization
• Supply chain issues with European suppliers, particularly Howden compressors

Despite these challenges, K. Srinivasan, Managing Director of Kirloskar Pneumatic, expressed optimism about the company's prospects. He stated, "We are confident that we will catch up on the planned numbers gradually, improving in Q2 and definitely coming to plan by Q3."

Financial Highlights

Positive Developments

Despite the slow start, Kirloskar Pneumatic achieved several positives:

1. Net working capital below 12% of sales for the first time
2. Cash flow generation of over Rs 100.00 crores
3. Stable EBITDA margins at 15.7%

New Product Launches

The company introduced two new products during the quarter:

1. Tezcatlipoca centrifugal compressors: Expected to generate Rs 100.00 crore in orders
2. Tyche semi-hermetic compressors: Targeting the commercial refrigeration market

Sector-wise Performance

• Air Compressors: Tezcatlipoca centrifugal compressors showed strong traction
• Refrigeration: Interest in Khione screw compressors for dairy and chemical plants increased
• Process Gas Compression: Facing global challenges, but seeing huge demand for CNG packages

Future Outlook

While acknowledging the current challenges, management remains optimistic about the company's future:

• Expecting gradual improvement in Q2
• Anticipating recovery to planned numbers by Q3
• Maintaining the Rs 2,000.00 crore revenue target for the year
• Focusing on in-house manufacturing capabilities and new product development

Mr. Srinivasan concluded, "The changes that have happened would only impact us positively as we go forward."

As Kirloskar Pneumatic navigates through the current economic uncertainties, its focus on innovation, new product launches, and operational efficiency positions it well for potential recovery in the coming quarters.