Kirloskar Brothers Limited (KBL) has taken legal action against a substantial GST demand, marking a significant development in the company's ongoing tax dispute with Andhra Pradesh authorities.

Writ Petition Filed

Directors of Kirloskar Brothers Limited have filed a writ petition with the Andhra Pradesh High Court, challenging GST demand notices totaling Rs. 15.48 crore. These notices are related to tax arrears from a joint venture project involving KBL, IVRCL Ltd., and Megha Engineering & Infrastructure Ltd. (MEIL).

Details of the Dispute

The dispute centers around a project executed for the Water Resources Department of the Government of Andhra Pradesh. The tax authorities initially issued notices to the majority of KBL's directors on January 21, claiming tax arrears of Rs. 15,48,06,528 for the year 2023-24. However, a subsequent demand notice dated August 5, revised the claim to Rs. 15,48,02,928 for the year 2017-18.

Legal Proceedings

KBL had previously filed a separate writ petition on August 12, challenging the demand notice. The Andhra Pradesh High Court granted an interim stay against recovery proceedings on August 20. The directors' recent writ petition, filed on November 19, seeks to set aside the impugned assessment order and demand notices, along with an interim stay pending the petition's resolution.

Financial Implications

The company has stated that the financial implications of this legal dispute cannot be ascertained at this juncture, given the ongoing legal proceedings. KBL has committed to informing the stock exchanges of any further developments in this matter.

Tabular Summary of Key Points

This legal challenge by Kirloskar Brothers Limited underscores the complexities that can arise in tax matters, especially those involving joint ventures and inter-state projects. The outcome of this case may have implications not only for KBL but also for other companies engaged in similar multi-party, cross-state projects.

Kirloskar Brothers Limited has received a credit rating outlook upgrade from CARE Ratings Limited, which revised the outlook on the company's long-term bank facilities to 'Positive' from 'Stable' while reaffirming the rating at 'CARE AA'. The rating agency communicated this decision on December 12, 2025.

Latest Credit Rating Action

CARE Ratings Limited has taken the following rating actions for Kirloskar Brothers Limited:

The company formally disclosed this development to the stock exchanges on December 13, 2025, in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Rated Bank Facilities

According to the company's regulatory filing, the current rated facilities include:

Previous Rating Framework Comparison

The latest rating action shows a shift from the previous rating framework. Earlier, CRISIL Ratings had rated the company's facilities with total bank loan facilities of ₹1,700.00 crores, which included bank guarantees of ₹1,100.00 crores, proposed long-term bank loans of ₹100.00 crores, and cash credit facilities of ₹500.00 crores.

Company's Financial Performance Context

Kirloskar Brothers Limited, a leading manufacturer of pumps and valves, has been demonstrating improved operational performance. The company's recent financial metrics include consolidated revenue of ₹1,028.00 crores and an order book (excluding small pumps business) of ₹2,127.00 crores, showing 13.00% year-on-year growth.

International Operations Growth

The company's international business has shown strong performance across multiple geographies:

The positive outlook revision by CARE Ratings reflects the expectation of continued improvement in Kirloskar Brothers Limited's business and financial risk profile. The company continues to focus on growth opportunities in sectors including power, urbanization, and data centers, positioning itself for sustainable long-term growth.