Kilburn Engineering: PAT growth of 57% & revenue growth of 40% in H1-25 at a PE of 46
Guidance of 50% revenue growth in FY25. Guidance of 40% revenue growth in FY26. Order book & expected order intake in place to support revenue guidance for FY25 & FY26.
1. Drying solutions & customised process equipment
kilburnengg.com | BOM : 522101
Kilburn Engineering Limited (KEL) is engaged in the designing, manufacturing, and commissioning of customised equipment/systems for diverse applications in industries such as chemical, petrochemical, oil & gas, refineries, power, steel, cement, fertilizer, mining, sewage treatment, food, among others. It also manufactures specially designed packages required for various onshore and offshore applications.
Kilburn has a 100% owned subsidiary M.E. Energy Private Limited a leading provider of custom-built Energy Saving, Heating, and Cooling Systems, specialized in Thermal Engineering.
2. FY20-24: PAT CAGR of 77% & Revenue CAGR of 26%
3. Strong FY24: PAT up 68% & Revenue up 49% YoY
4. Strong Q2-25: PAT up 32% & Revenue up 21% QoQ
YoY numbers are not comparable due to the Impact of acquisition ME Energy.
M.E. Energy, the acquisition of this company by Kilburn was completed on 20th of Feb, 2024
5. Strong H1-25: PAT up 57% & Revenue up 40% YoY
Comparison of the Kilburn business in H1-24 with Kilburn + ME Energy business in H1-256. Business metrics: Strong return ratios
The growth in turnover, EBITDA and PBT should continue resulting in higher free cashflows which should enable the company to become net debt free in the next 12 to 18 months
7. Outlook: 50% revenue growth in FY25
i. FY25: Revenue growth of 50%
From a consolidated revenue of Rs 333 cr in FY24 to Rs 500 cr in FY25 implies a revenue growth of 50%
With the current pace of execution and the orders in hand we are confident of achieving ₹500 crores revenue for the current year at the group level.
ii. EBITDA Margin of 20% in FY25
Guidance is lower than FY24 EBITDA & one needs to watch out for weakness in margins in FY25 impacting bottom-line growth.
Guidance: On the profitability front, we continue our target of 20% plus and we are sure of achieving it.
FY24: Achieved a robust operating EBITDA margins of 25.21% and 23.19% for the quarter & year ended respectively.
iii. FY26: Revenue growth of 40%
FY25 expected revenue of Rs 500 cr growing to Rs 700 cr is pointing to 40% growth in FY26.
If you look at the consolidation of M.E. Energy and Monga Strayfield, both these together will definitely add over ₹200 crores of revenue in FY26 and Kilburn should continue to look at growing at 25%, 30% CAGR. So all that put together I think we are going to target a ₹700 crore kind of number for FY26.
iii. Order-book providing revenue visibility for H2-25
Order book of Rs 354 cr as of Q2-25 end with additional orders of Rs 130 cr in ongoing Q3-25 is in place to support achieving revenue guidance of Rs 500 cr for FY25.
8. PAT growth of 57% & revenue growth of 40% in H1-25 at a PE of 4
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9. Hold?
If I hold the stock then one may continue holding on to Kilburn
KIlburn is on track to deliver as per FY25 guidance with indication of a strong H2-25.
So based on the backlog and the recent orders, we are confident of executing a higher turnover in the second half of the year.
Kilburn management is indicating for a strong FY26 with 40% revenue growth supported by the target of order intake of Rs 500 cr plus for FY25
In addition, we continue to aggressively pursue a strong enquiry pipeline at group level, which is around ₹2,000 crores plus. At group level, we still continue to target an aggregate order intake of ₹500 crores plus for the current financial year
Before FY23, Kilburn does not have a consistent track record of solid execution. One needs to monitor execution on its guidance quite closely as the management is guiding for strong upcoming years
On Monga Strayfield Acquisition: The proposed acquisition is currently going through due diligence and we expect it to get completed by December end.
They have been global leaders in drying and heating solutions using the RF, or the radio frequency technology.
10. Buy?
If I am looking to enter the stock then
Kilburn has delivered PAT growth of 57% & Revenue growth of 40% in H1-25 at a PE of 46 which makes valuations fairly priced in the short term.
Kilburn is guiding for revenue growth of 50% in FY25 to reach a revenue of Rs 500 cr at a PE of 46 which makes the valuations fully priced from the medium term.
Kilburn is guiding for revenue growth of 40% in FY26 to reach a revenue of Rs 700 cr (FY24-26 CAGR of 45%) at a PE of 46 which makes the valuations reasonable from a longer term perspective.
The order-book and the expected order inflow during FY25 provide confidence in the ability of the management to deliver on the revenue guidance.
The margin of safety at PE of 46 is limited and if execution does not go as per guidance then a reaction is expected in the price.
Previous coverage of Kilburn
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