Kirloskar Ferrous Industries LtdQ4 FY27
Kirloskar Ferrous Industries Ltd Q4 FY27 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹482P/E: 19.0Market Cap: ₹7.4K CrSector: Ferrous Metals
Management growth scorecard
Revenue
Category 3
Margin
Category 3
Fundraise
N/A
Order
N/A
Capex
Yes
1 of 3 growth signals are positive — mixed outlook.
Full analysisRevenue guidance
Category 3- →Steel sales target: Increase to at least 120,000 tons next year (FY '27).
- →Tube sales: Expected growth from ~190,000-195,000 tons this year to 220,000-230,000 tons next year; planning to reach 230,000 tons with future expander mill.
- →Casting sales: Target to grow from about 160,000-163,000 tons to close to 190,000 tons next year, with Solapur ramp-up to 50,000-62,000 tons over next two years.
- →Pig iron: External sales around 580,000-600,000 tons, with plans to upgrade Hiriyur blast furnace to boost hot metal production to 900,000 tons eventually.
- →Expected volume growth across segments: 15% to 20%, supporting a CAGR of 14%-16%.
- →Castings: Increase by 10,000 tons per year in Solapur; Punjab Foundry (Oliver) expected to contribute ~15,000 tons per annum.
- →Overall focus on growth despite market price drops in pig iron (9%) and tubes (10%).
Margin guidance
Category 3- →The company aims for a CAGR growth of 14% to 16% in value numbers over the coming years.
- →Target volumes for next year include:
- → - Steel sales to increase to at least 120,000 tons.
- → - Tube sales growth from around 190,000-195,000 tons to 220,000 tons.
- → - Casting sales to grow from about 163,000-190,000 tons to approximately 190,000 tons.
- → - Pig iron external sales projected close to 580,000-600,000 tons.
- →The growth expectation in volume terms is reasonably good, around 15% to 20%, not very high but steady.
- →Challenges include product price drops of ~9% in pig iron and 10% in tubes due to market forces.
- →Expansion and ramp-up plans (e.g., casting capacity at Solapur, merging Punjab foundry and Oliver foundry) are expected to support volume and profit growth.
- →Green power projects (solar and wind) commissioning will improve cost efficiency starting FY 27.
- →Overall, management is confident of progressing earnings despite market headwinds.
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Fundraise plans
- →There is no direct mention of any current or planned fundraising through debt or equity in the provided transcript.
- →The management discusses multiple ongoing and planned capacity expansion and green power projects (solar and wind), but no references to raising funds through equity or debt are mentioned.
- →Project execution and equipment ordering for the steel plant at Koppal are planned by end of March, but funding details are not disclosed.
- →The company is prioritizing various projects but has not indicated any plans for additional fund raising as per the call transcript.
- →Overall, no explicit information on new fundraising through debt or equity is provided in the document.
Order book
- →The ONGC order is a significant part of the current orderbook in the seamless tube segment.
- →The complete execution of the ONGC order will span over the current and next quarter, indicating a sizable pending order volume.
- →The company is expecting a big lineup of sales in the oil and gas sector for the current quarter, tied to the ONGC order.
- →Specific volume guidance related to the ONGC order shows it contributes notably to tube sales.
- →Casting division ramp-up plans hint at pending new orders and opportunities, especially related to new product developments at Solapur.
- →The company aims to achieve reasonably good growth in steel sales (~120,000 tons), tube sales (~220,000 tons from ~190,000 tons this year), casting sales (~190,000 tons), and pig iron close to 600,000 tons.
- →Overall, a continued compound annual growth rate (CAGR) of ~14-16% is targeted, factoring in market price pressures.
Capex plans
Yes- →Kirloskar Ferrous Industries is commissioning incremental green power capacity of 130 MW (70 MW solar + 25 MW wind) targeted for commissioning between April to September FY '27, aiming for a total of ~200 MW solar equivalent capacity.
- →Plans to upgrade the Hiriyur pig iron blast furnace to increase hot metal capacity from ~7 lakh tons to 9 lakh tons over the next 1-2 years, subject to prioritization against other projects.
- →Planning to commission a new steel plant at Koppal with equipment orders expected to be finalized by 31 March 2026, with commissioning targeted in about 2 years.
- →Considering expansion in tube production capacity with an expander mill under planning to increase capacity beyond 230,000 tons.
- →Ongoing efforts to merge Oliver Foundry and Punjab Foundry into Kirloskar Ferrous Industries to enhance casting capacity and volumes.
- →Continued investment across steel, casting, and green power segments as part of long-term growth strategy.
How does Kirloskar Ferrous Industries Ltd rank vs peers in Ferrous Metals?
Pro feature1Kirloskar Ferrous Industries Ltd
Rev 3Mar 3
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