Kirloskar Pneumatic Company (KKPC IN) – Q4FY26 Result Update – Strong Q4; favourable OB to ensure healthy growth – BUY

Kirloskar Pneumatic (KKPC) delivered a strong quarter with revenue growth of 20.3% YoY and EBITDA margin of 26.1%, supported by a favourable product mix, backward integration initiatives and execution of higher-margin packages. Air compressors (~18% of revenue) remain a key growth driver, led by continued ramp-up of Tezcatlipoca, new product launches such as the oil-free Hydrino compressor, and healthy order inflows from pharma, tyre and textile segments. The refrigeration segment is gaining traction with improving acceptance of Khione and upcoming commercialization of Zephyros in Q1FY27, albeit with an initial focus on volumes. Gas compression is witnessing gradual recovery with improving order finalisation, while the Precision Engineering segment is emerging as an incremental growth lever with strong order inflows. The order book remains healthy at ~INR18.6bn, largely executable in FY27, although export (6% of total revenue) momentum remains mixed with slower traction in the Middle East and increasing focus on Southeast Asia and North Africa. Overall, KKPC continues to strengthen its growth profile through product innovation, backward integration and diversification into new segments. The stock is currently trading at P/E of 31.7x/27.0x on FY27E/FY28E. We roll forward to Mar’28 and maintain ‘Buy’ rating with a TP of Rs1,715 (Rs1,556 earlier) valuing the business at a PE of 32x Mar’28E (32x Sep’27E earlier).