Synopsis:
Kirloskar Pneumatic Company is in focus as Prabhudas Lilladher expects the stock to rise by another 31 percent from its current level, citing strong market demand for its products and a confident growth guidance for the future by the management.
The shares of this market leader in CNG systems and oil and gas refrigeration in India are in focus after a leading brokerage laid out numerous reasons behind the 31 percent uptick. In this article, we will dive more into the details.
With a market capitalization of Rs 8,108 crore, the shares of Kirloskar Pneumatic Company Ltd are currently trading at Rs 1,249 per share, representing a decline of 31 percent from its 52-week high of Rs 1,818. In the last one year, the stock has corrected by 6 percent.
Analyst Comments
Prabhudas Liladhar has assigned a Buy call on the share and has set a target price of Rs 1,636 per share, signalling a potential upside of 31 percent from its current market price of Rs 1,249 per share.
Prabhudas Liladhar cited that KKPC’s Tezcatlipoca centrifugal compressors are gaining high traction in the Air Compression segment and are conquering the market. Still, the Refrigeration Compression segment is holding the pace well and getting ready to increase the revenue share up to ~45 percent against ~35 percent previously, as a result of the customer base connecting with both the industrial and commercial sectors.
The Gas Compression segment is still weak; however, the demand for gas booster packages remains stable. KKPC is likely to rely on products like Tyche and initiatives such as the RenovAir replacement scheme to create a continuous flow of customers as the company embarks on a journey of upward growth.
The company anticipates strong growth ahead, with management guiding for 18-20 percent revenue growth in FY26, followed by a 20 percent CAGR in the coming years. The company expects a strong rebound in H2FY26 despite some delays in contract finalizations.
Alongside new product launches and market share gains, KKPC aims to expand EBITDA margins to ~20 percent, and potential entry into export markets could further strengthen its long-term growth prospects.
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Financial Highlights
The company’s revenue for Q1 FY26 came in at Rs 282 crore, up by 3 percent from Rs 275 crore in the same quarter last year. However, on a sequential basis, revenue declined by 52 percent from Rs 592 crore in Q4 FY25.
Coming to its profitability, the company reported a net profit decline of 7 percent to Rs 25 crore in Q1 FY26 as compared to Rs 27 crore in Q1 FY25. Additionally, on a QoQ basis, it recorded a decline of 69 percent from Rs 80 crore.
Kirloskar Pneumatic Company Limited is a designer and manufacturer of air, gas, and refrigeration compressors, besides pneumatic tools and transmission products. Its product line includes refrigeration systems, CNG and biogas compressor packages, marine and industrial compressors, as well as gearboxes for rail, marine, wind, and hydro.
The company has a diverse customer base that includes the oil & gas, power, steel, automotive, railways, chemicals, food, and construction sectors, and is also engaged in logistics services through the rail networks.
Written by Satyajeet Mukherjee
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