Axis Securities continues to maintain BUY on Kirloskar Brothers with Target Price of Rs. 2100 reflecting a 19% upside from the current market price (CMP).

Kirloskar Brothers recorded 19% YoY revenue growth in the December 2024 quarter, with the domestic business growing by 3% and the international business expanding by 23%. With an order inflow of Rs. 818 Crores, the domestic order book stands at Rs 1,967 Crores as compared to Rs 1,954 Crores in Q2FY25.  Growth in overseas markets was fuelled by strong performance in SPP UK and Dutch subsidiaries, while SPP US saw increased traction post-elections

Kirloskar Brothers has been actively shifting towards high-value products while reducing dependence on low-margin and lumpy EPC orders. Investments in technological upgrades have enhanced operational efficiency and product value, contributing to significant margin expansion over the last two quarters. The management remains confident in sustaining this positive margin trajectory moving forward.

With a robust order book of Rs 3,094 Cr, the company maintains its double-digit revenue growth guidance for FY25, driven by sustained demand across key markets and a strong order book.  Order intake is expected to remain robust, while cost optimization initiatives and an enhanced product mix should further support margin expansion. Axis is very Positive on the Sector and for Kirloskar Brothers, the key growth sectors include Building & Construction, Industrials, Water & Irrigation, Power, and Oil & Gas.