KFIL revenue hits Rs 2,046.7 crore as margin falls to 10.9%

Kirloskar Ferrous reported standalone revenue from operations of Rs 2,046.7 crore in Q2 FY27, 17% above Q2 FY26 and the highest level in its disclosed six-quarter trend. EBITDA excluding other income and before exceptional items rose 4% to Rs 223 crore, while the EBITDA margin fell to 10.9% from 12.2% as material costs reached 57.7% of revenue.

How did KFIL's Q2 FY27 earnings change?

KFIL's standalone revenue from operations increased by Rs 291.4 crore from Q2 FY26 and by Rs 275.2 crore from Q1 FY27 to Rs 2,046.7 crore in the quarter ended 30 September 2026. Total income was Rs 2,066 crore after Rs 19.3 crore of other income, compared with Rs 1,759.8 crore a year earlier. The Q2 revenue figure also exceeded the prior high in the disclosed six-quarter trend of Rs 1,817.2 crore in Q4 FY26.

EBITDA excluding other income and before exceptional items increased to Rs 223 crore from Rs 214.4 crore in Q2 FY26 and Rs 215.7 crore in Q1 FY27. Profit before tax, before exceptional items, rose to Rs 137.8 crore from Rs 119.9 crore a year earlier. Profit after tax was Rs 97.6 crore, compared with Rs 88.5 crore in Q2 FY26 and Rs 82.3 crore in Q1 FY27, while finance costs increased to Rs 34 crore from Rs 32.6 crore a year earlier.

What caused KFIL's EBITDA margin to decline?

KFIL's EBITDA margin declined because material costs rose faster than revenue in Q2 FY27. Material costs were Rs 1,159.8 crore, compared with Rs 1,014.1 crore in Q2 FY26, and represented 57.7% of revenue against 55.2% a year earlier. The ratio also increased from 53.7% in Q1 FY27, a four-percentage-point sequential movement that coincided with the EBITDA margin falling from 12.2% to 10.9%.

Other expense lines also increased in absolute terms during the quarter. Other expenses were Rs 534.2 crore, up from Rs 474.6 crore in Q2 FY26, while employee-benefit expense rose to Rs 109 crore from Rs 97.1 crore. Power costs as a share of revenue declined to 8.0% from 8.7% a year earlier and 9.3% in Q1 FY27, but that reduction did not offset the higher material-cost ratio.

The presentation says landed coking-coal prices jumped sharply in September before easing slightly while remaining volatile. It also says rupee depreciation increased imported coking-coal prices, an input consideration for the blast-furnace route. Domestic iron-ore supply was described as ample and National Mineral Development Corporation pricing as broadly stable, contrasting with the cost pressure in coking coal.

Which products drove KFIL's revenue growth?

KFIL's castings and steel businesses recorded the largest percentage growth in Q2 FY27 product sales. Castings revenue rose 30% year on year to Rs 633 crore as volume increased 20% to 47,888 metric tonnes (MT), while steel revenue increased 48% to Rs 206 crore as volume grew 34% to 26,606 MT. Castings realisation reached Rs 132,192 per MT and steel realisation reached Rs 77,523 per MT.

Pig iron sales contributed Rs 581 crore, 20% above Q2 FY26, with volume up 3% to 134,940 MT and realisation up 16% to Rs 43,054 per MT. Tubes revenue was unchanged year on year at Rs 568 crore because a 2% decline in volume to 48,547 MT was offset by a 3% increase in realisation to Rs 116,953 per MT. Other sales fell 26% to Rs 59 crore.

Sequentially, each of the four disclosed operating products increased sales revenue from Q1 FY27. Castings rose by Rs 106 crore, tubes by Rs 93 crore, steel by Rs 38 crore and pig iron by Rs 35 crore. Volumes increased 16% quarter on quarter for castings, 17% for tubes and 18% for steel, while pig-iron volume rose 5%, indicating that Q2 revenue growth reflected both throughput and product realisations.

How does KFIL's first-half performance compare with earlier periods?

KFIL reported H1 FY27 revenue of Rs 3,818.2 crore, compared with Rs 3,453.6 crore in H1 FY26, while EBITDA increased to Rs 438.7 crore from Rs 431.3 crore. The H1 FY27 EBITDA margin was 11.5%, below the 12.2% reported for FY26 and the 14.2% reported for FY24. H1 material costs were 55.9% of revenue, lower than the Q2 FY27 ratio of 57.7% but above the 54.9% reported for FY24.

H1 FY27 profit after tax was Rs 179.9 crore and finance costs were Rs 63.5 crore, compared with Rs 324 crore and Rs 66.6 crore respectively in H1 FY26. The presentation reports an exceptional item of Rs 29.3 crore in Q1 FY27, resulting in H1 FY27 profit before tax after exceptional items of Rs 242.87 crore, against Rs 247.09 crore in H1 FY26. KFIL also recorded year-to-date FY27 capital expenditure of Rs 274 crore for efficiency and green-energy projects.

Working-capital indicators showed inventory days declining to 46 in Q2 FY27 from 47 in Q2 FY26 and 48 in Q4 FY26. Debtor days were 56, unchanged from Q2 FY26 but higher than 50 in Q4 FY26. Gross debt stood at Rs 1,260 crore as of September 2026, and KFIL reported net debt to EBITDA of 1.40 times, defining net debt as gross debt less cash and bank balances.

Conclusion

KFIL's Q2 FY27 figures show that higher sales volumes and realisations produced the highest revenue in the disclosed six-quarter trend, without proportional operating-profit growth. Revenue rose 17% year on year while EBITDA rose 4%, as the material-cost share of revenue increased by 2.5 percentage points and the EBITDA margin declined by 1.3 percentage points to 10.9%.

The next period will indicate whether September's increase in landed coking-coal prices continues to affect costs and whether management's expectation of healthy second-half demand, supported by infrastructure and construction activity, is realised. KFIL's Rs 274 crore of year-to-date FY27 efficiency and green-energy capital expenditure, along with inventory days, debtor days and the Rs 1,260 crore gross-debt position, are disclosed measures to watch next.