Kilburn Engineering Powers Ahead with Strong Q2 FY26 Performance and Strategic Growth

Kilburn Engineering Limited, a pioneer in industrial drying and energy recovery systems, has reported a robust performance for the second quarter and half year ended September 30, 2025. The company's consolidated financials reflect significant growth, driven by strategic acquisitions, diversified product offerings, and a strong order book. This quarter's results underscore Kilburn's ability to execute complex, high-value projects efficiently while maintaining healthy margins, positioning it for sustained growth in the coming years.

For Q2 FY26, Kilburn Engineering's consolidated total income from operations surged to 155.99 crore, a substantial increase from 104.27 crore in the corresponding period last year. Operating EBITDA for the quarter also saw a remarkable rise to 42.17 crore, up from 23.62 crore in Q2 FY25. This strong operational performance translated into a Profit Before Tax of 37.42 crore and a Profit After Tax of 26.88 crore. The first half of FY26 also demonstrated impressive momentum, with total income reaching 287.77 crore and Operating EBITDA at 78.01 crore, reflecting approximately 50% year-on-year growth in topline.

Strategic Expansion and Diversification Fueling Growth

The company's strategic initiatives, particularly the acquisitions of M.E. Energy Private Limited and Monga Strayfield Private Limited, have been pivotal in its growth trajectory. M.E. Energy, acquired in February 2024, specializes in waste heat recovery (WHR) systems. This integration has synergized Kilburn's thermal and mechanical engineering capabilities, enhancing its technological offerings and operational efficiencies. M.E. Energy has already secured significant EPC contracts in the ferroalloys sector, marking a breakthrough into new markets and diversifying the business base. Monga Strayfield, acquired in January 2025, brings expertise in Radio Frequency (RF) heating and drying equipment. This has enabled Kilburn to offer innovative, high-performance solutions across diverse industries, including textiles, packaged foods, and fiberglass, while expanding its international presence.

Kilburn Engineering is also investing in capacity expansion. A brownfield CapEx of 25 crore is planned for its Saravali plant, expected to be completed by Q2 FY27, which will add approximately 100 crore to its revenue generating capacity. Additionally, a CapEx of 10-15 crore is planned for M.E. Energy, projected to generate an additional 75-100 crore in revenue, with commencement expected by Q3 FY26. These investments are crucial for supporting the anticipated growth and enhancing execution capabilities.

Robust Order Book and Market Traction

The company's robust order book and healthy inquiry pipeline underscore its strong market position. As of September 30, 2025, Kilburn Engineering had an order backlog of 492 crore. Post quarter-end, additional orders and Letters of Intent (LOIs) worth 129 crore have been received, bringing the total unexecuted order pipeline to approximately 600 crore. The inquiry pipeline remains strong, exceeding 4,000 crore on a consolidated basis, spanning multiple industrial sectors such as chemical, petrochemical, refinery, oil & gas, power, fertilizer, food, nuclear, metal recovery, and cement. This robust pipeline, coupled with a historical conversion rate of 20-25%, provides strong revenue visibility for the next 7-12 months.

Management highlighted that the 'Make in India' initiative has significantly boosted traction, especially for exports. The company is actively focusing on tapping export markets, with recent entries into Morocco and Korea, aiming to increase its export revenue share from a historical 15% to 30-40%. Strategic tie-ups with global players like Komline Sanderson (USA) and Nara (Japan) are enhancing Kilburn's technological edge and providing access to new international markets, allowing for both marketing and manufacturing of advanced drying systems.

Outlook and Financial Discipline

Kilburn Engineering's management is confident in achieving a ~50% topline growth for FY26, targeting approximately 650 crore, followed by a CAGR of 25-30% from FY27 onwards. The EBITDA margin is expected to be around 26% for the current year and sustainable at 23-25% for the next two to three years, driven by economies of scale and a favorable order mix. Despite significant growth and acquisitions, the company has maintained financial discipline, being virtually net debt zero with strong cash balances and fixed deposits. While receivables increased due to high dispatches in Q2 FY26 and cash flow remained negative, management expects these to normalize with timely collections. The increase in tax outgo is attributed to the full utilization of carry-forward losses.

Kilburn Engineering is clearly in a strategic growth phase, marked by successful integrations, capacity expansions, and a sharpened focus on both domestic and international markets. The company's commitment to innovation, diversified offerings, and disciplined execution positions it well to capitalize on emerging opportunities and deliver sustained value to its stakeholders.