Kirloskar Pneumatic Navigates H1 FY26 with Strategic Shifts and New Product Momentum

Kirloskar Pneumatic Company Limited, a prominent player in industrial equipment, reported a challenging first half for fiscal year 2026, with H1 sales at INR 665.1 crore, a decline from INR 706.5 crore in the corresponding period of the previous year. This dip in performance was primarily attributed to a muted domestic market, project clearance delays, and a structural shift in the process gas business. Despite these headwinds, the company demonstrated resilience through strategic new product launches and a strong focus on indigenous manufacturing, setting the stage for an anticipated robust recovery in the second half of the fiscal year.

The company's H1 FY26 standalone total income stood at INR 665.1 crore. Profit Before Tax (PBT) for H1 FY26 was INR 93.8 crore, with a margin of 14.1%, compared to INR 127.9 crore and 17.8% in H1 FY25. Profit After Tax (PAT) for H1 FY26 was INR 71 crore, reflecting a margin of 10.7%, down from INR 94.4 crore and 13.1% in H1 FY25. The EBITDA for H1 FY26 was INR 109 crore, with a margin of 16.4%, compared to INR 143 crore and 20.0% in H1 FY25. These figures underscore the impact of the challenging market conditions and execution delays experienced during the period.

Segmental Performance and Strategic Shifts

Segment-wise, the company observed significant shifts. The gas segment, which historically contributed around 45% of revenue, has seen its share decrease to approximately 30-35% in H1 FY26. This decline is largely due to intense competition and aggressive pricing strategies by newer entrants in the CNG packages and boosters market. In contrast, the refrigeration segment's contribution increased to over 35%, driven by strong demand for Khione packages in sectors like pharma, dairy, fisheries, and food processing. Air compressors maintained a contribution of around 20%, while the 'Others' segment, including industrial gearboxes and loco transmissions, is scaling up and now contributes approximately 12.5%.

Kirloskar Pneumatic is actively addressing these shifts through innovation. The Tezcatlipoca centrifugal compressor has emerged as an industry standard, with 115 installations since its launch. The company also introduced Janus D specialty motors and Tyche semi-hermetic compressors, which are expected to scale up in the coming quarters. A significant strategic move is the company's planned entry into the commercial air conditioning market with its unique Zephyros C system. This indigenous product, offering zero global warming potential, aims to capture a substantial share of the INR 5,000 crore market segment. Furthermore, the company secured its first order for a hydrogen compressor, marking a breakthrough in the new energy space and positioning itself as a critical player in the evolving hydrogen value chain.

Operational Efficiency and Future Outlook

Despite the revenue challenges, Kirloskar Pneumatic maintained a strong balance sheet. The company remains debt-free, boasting a net cash and cash equivalent position of INR 424 crore as of October 1, 2025. Free cash generation from operations in H1 FY26 was INR 143 crore, underscoring robust cash management. Strategic investments in solar systems have also yielded benefits, ensuring consistent power costs despite increased operational activity. The company's Saswad Plant was recognized with the 'Energy Efficient Plant Award' at the 26th CII National Awards, highlighting its commitment to sustainable practices.

Management expressed confidence in a strong recovery in H2 FY26, projecting a full-year top-line growth of over 15% and profit growth of 25-30%. They anticipate significant order bookings, targeting over INR 500-600 crore in Q3 FY26. The company's strategic focus on domestic markets, in-house manufacturing, and technological differentiation is expected to drive this growth. Kirloskar Pneumatic is clearly navigating the current market complexities with a clear vision, leveraging its innovative product pipeline and strong financial foundation to achieve sustained growth.