Corporate Development     

Published: November 15, 2024
Updated: November 15, 2024

Kirloskar Pneumatic Company

Acquisition to power refrigeration

Pune-based Kirloskar Pneumatic Company (KPCL) recently entered into a share purchase agreement to acquire a 55.26% stake, for around Rs 15.50 crore, in Systems & Components India Pvt Ltd, a significant player in refrigeration packages for the pharma, chemical and dairy industries. With this acquisition, the company will have a stronger presence in the refrigeration and chiller packaging space, thus expanding the addressable market for KPCL. The transaction is expected to close by end-December 2024.

KPCL is a diversified company offering a comprehensive range of products, including air, refrigeration, gas compressors and systems, vapour absorption chillers and industrial gearboxes. Broadly, the company caters to the steel, cement, cold chain, food and beverages, railways, defence, marine and pharma industries. It also has a significant presence in the oil & gas sector and is a key player in the CNG business in India.

Recently, the company launched the ‘Jarilo’ range biocompressor to cater to the new requirements of the bio-gas industry, and it was well-received in the market. The ‘Jarilo’ high-pressure compressors can achieve pressures up to 250 bar, making them suitable for a range of advanced biogas applications, including cascade filling. Leveraging its extensive industry experience, KPCL has forged technology partnerships with leading global companies and research institutes, ensuring cutting-edge solutions and innovations.

REVENUE DOUBLES

During the second quarter of FY25, the company reported revenues of Rs 431 crore (up 53%). The EBITDA margin improved to 23% compared to 13% in Q2FY24. PBT was higher at Rs 92 crore vis-à-vis Rs 27 crore in the previous year (up 240%). PAT also improved to Rs 68 crore against Rs 20 crore in the corresponding period of the previous year, translating into an EPS of Rs 10.42 per share vis-à-vis Rs 3.12 in FY24. Reviewing the first six months’ performance ended September, revenue from operations has risen by 35% to Rs 706 crore, and EBITDA to Rs 143 crore (@ 20%) as against Rs 68 crore (@12.7%) in FY24. Likewise, PAT at Rs 94 crore has been quite impressive (up 147%) against Rs 38 crore in the first half of the previous year, translating into an EPS of Rs 14.57 (PY Rs 5.89).

KPCL’s order book stood at around Rs 1,780 crore as on October 1, 2024, which is higher by 23% vis-à-vis Rs 1,450 crore in the previous year. The compression business continues to be around 94% of revenue. The company had clocked net revenue of Rs 1,323 crore during FY24. At the current price of Rs 1,562 (face value Rs 2), KPCL has a market capitalisation of Rs 10,127 crore. The promoter group holds 38.89% of the total equity share capital of Rs 12.97 crore.