Summary
Kilburn Engineering Limited - Q3 FY2026 Earnings Call Summary Wednesday, February 11, 2026
Event Participants
Executives 5 Amol Monga (Whole-time Director, Monga Strayfield), Amritanshu Khaitan (Director), K. Vijaysanker Kartha (MD, M.E. Energy), Ranjit Lala (MD, Kilburn), Sachin Vijayakar (CFO)
Analysts 8 Abhijit Mitra (Participant), Ankur (Question board), Dinesh (Participant), Karthik (Participant), Priyesh Babariya (Participant), Rabindra Nayak (Participant), Sagar Shah (Participant), Tejas (Participant)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Consolidated) | ₹157 crores | +15% YoY; Driven by strong execution across Kilburn and subsidiaries. |
| Revenue (Standalone) | ₹105 crores | Focus on rotary dryers, which contributed ₹40 crores to recent major orders. |
| EBITDA Margin (Standalone) | 25% | Consistent quarterly performance; Management targets 22-23% for the full year. |
| Order Backlog (Consolidated) | ₹495 crores | Includes ₹306 crores from Kilburn, ₹170 crores from M.E. Energy, and ₹20 crores from Monga Strayfield. |
| Order Inflow (Jan 1 - Feb 11) | ₹70 crores | New orders and Letters of Intent received post-quarter end. |
| Inquiry Pipeline | ₹4,000 crores | Level maintained consistently over last 2-3 quarters across multiple verticals. |
| Export Revenue Mix | ~30% | Expected for FY26; includes significant projects like OCP-JESA (Morocco). |
| Capital Expenditure | ₹40 - ₹45 crores | Planned over next 12 months for Saravali and Pune facility expansions. |
| Cash & Bank Balance | ₹30 crores | Absolute amount as of December 31, 2025, including margins. |
Geographic & Segment Commentary
- M.E. Energy: Expected to be the fastest-growing vertical in FY27, focusing on thermal equipment for Cement (breakthrough with Shree Cement), Ferroalloys, and Steel industries. Expansion at the Pune plant will increase production capacity by nearly 50% to support a projected revenue of ₹100-₹110 crores.
- Monga Strayfield: Targeted to contribute ₹90-₹95 crores to the top line by year-end, focusing on radio frequency drying solutions. Management is currently evaluating additional CAPEX requirements for this subsidiary.
- Nuclear & Specialized Energy: Secured orders from Nuclear Power Corporation and Heavy Water Board for pump room coolers and specialized reactors. Management notes high barriers to entry and expects significant traction post-international trade deals.
- Kilburn East End Pvt Ltd (JV): Newly formed joint venture to provide specialized site fabrication and erection services (piping, structural, rotary equipment) for EPC companies like L&T. Targeted to achieve ₹50 crores in orders during its first full year of operation (FY27).
Company-Specific & Strategic Commentary
- Capacity Expansion: Commenced Phase 2 expansion at M.E. Energy (Pune) and factory expansion at Saravali to support a medium-term revenue target of ₹1,000 crores.
- Margin Sustainability: While specific projects like OCP Morocco boost margins to 25%+, management guides for a sustainable 20%+ EBITDA margin as the base scales.
- Risk Mitigation: Company blocks 80% of raw material requirements within 72 hours of receiving an LOI to hedge against commodity price fluctuations in fixed-rate contracts.
- Inorganic Growth: Management confirmed they are actively evaluating opportunities for further acquisitions to complement the existing portfolio.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY26 Revenue | ₹625 - ₹650 crores | Represents 50% YoY growth; Q4 revenue expected between ₹175 - ₹200 crores. |
| FY27 Revenue | ₹800 crores | Based on a projected 25% CAGR and expansion of M.E. Energy capacity. |
| FY28 Revenue | ₹1,000 crores | Long-term milestone driven by capacity expansions and growing inquiry pipeline. |
| EBITDA Margin | 22% - 23% | Guidance for the full year FY26; 20%+ guided for the medium term. |
| Equity Infusion | ₹138 crores | Remaining warrant conversion proceeds expected by May 2026. |
Risks & Constraints
| Risk | Context |
|---|---|
| Working Capital Intensity | Contract assets and unbilled revenue impact cash flows; management expects improvement via enhanced banking limits. |
| Raw Material Volatility | Fixed-price contracts pose a risk, mitigated by immediate 80% material blocking upon order receipt. |
| Execution Delays | Regulatory approval delays for Saravali expansion have previously pushed planned CAPEX into the next fiscal year. |
| Operating Expenses | Rising “Other Expenses” due to high export freight costs and ECL provisions on unbilled revenue can squeeze margins. |
Q&A Highlights
Margin Profile & Sustainability
- Question: What caused the EBITDA margin dip from 26% to 23% this quarter? (Ankur)
- Answer: Margins fluctuate based on project mix; last quarter was exceptionally high due to the Morocco project. The annual target remains 22-23% (Ranjit Lala).
- Answer: Increased “Other Expenses” related to high export freight and ECL provisions also impact quarterly optics (Sachin Vijayakar).
Growth Drivers & Capacity
- Question: Are we fully booked at current plants, and where will FY27 growth come from? (Sagar Shah)
- Answer: We are well-booked; expansions at Saravali and Pune (completing in 6-8 months) are designed to reach the ₹800-₹1,000 crore revenue level. M.E. Energy will see the highest growth in FY27 (Ranjit Lala).
Nuclear Sector Opportunities
- Question: Can you elaborate on the nuclear sector orders? (Daksh Malhotra)
- Answer: Supplying pump room coolers and heavy water vapor recovery systems. Recent trade deals and BARC-designed processes are opening a significant long-term vertical (Ranjit Lala).
New Business Initiatives
- Question: What is the rationale for the new Kilburn East End JV? (Sagar Shah)
- Answer: It targets site-specific services (piping and erection) for EPC players like L&T in the oil & gas sector, a segment Kilburn previously did not service directly (Ranjit Lala).
Key Takeaway
Kilburn Engineering delivered a steady Q3 FY26 with consolidated revenue of ₹157 crores and a robust standalone EBITDA margin of 25%. The company is on track to meet its 50% YoY growth guidance, targeting ₹625-₹650 crores for the full year, supported by a diverse ₹4,95 crore order book and a massive ₹4,000 crore inquiry pipeline. Strategically, the firm is pivoting toward higher-growth areas like nuclear energy and waste heat recovery through M.E. Energy, while expanding physical capacities at Saravali and Pune to facilitate a ₹1,000 crore top-line goal by FY28. Management remains focused on margin discipline, guiding for 20%+ EBITDA despite fluctuations in project mix and freight costs. With upcoming warrant conversions of ₹138 crores by May 2026, the company appears well-capitalized to fund its ₹45 crore CAPEX plan and pursue potential inorganic growth opportunities.
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