Kirloskar Pneumatic Company (KKPC IN) – Q3FY26 Result Update – Decent Q3; all eyes on large package dispatches – BUY
Published on 23 Jan 2026
Kirloskar Pneumatic (KKPC) delivered 18.8% YoY revenue growth, alongside 509bps YoY expansion in EBITDA margin to 19.5% in Q3FY26. During the quarter, persistent dispatch delays led to a build-up of inventory in large packages and impacted revenue recognition. However, improved procurement efficiencies supported margin expansion. The management has guided for Rs18-18.5bn revenue in FY26, supported by expected inventory liquidation by Q4FY26. Tezcatlipoca continues to be a key growth driver, with plans underway to double its manufacturing capacity. Refrigeration is expected to account for the lion’s share of revenue going forward, led by new product introductions and consumption-driven demand from end-industries such as F&B, dairy and pharma, while O&G is yet to witness a meaningful recovery, despite a modest uptick in order finalizations during the quarter. We revise our FY26/27E EPS estimates by -4.2%/-1.9%, considering the ongoing slowdown in inventory clearances. The stock is currently trading at a PE of 24.5x/19.9x on FY27/28E. We maintain our ‘BUY’ rating with a TP of Rs1,557 (Rs1,620 earlier), valuing the business at a PE of 32x Sep’27E (33x Sep’27E earlier) amid uncertainties surrounding dispatches and finalizations.
