Kirloskar Ferrous targets FY27 15% volume growth plan

What the company is signalling for FY27

Kirloskar Ferrous Industries (KFIL) has laid out an upbeat operating plan for FY26-27, guided by double-digit volume growth across pig iron, iron castings and seamless tubes. Management indicated it is looking at volumetric growth of around 15%, a level it described as reasonable versus last year’s base of about 139,000. Alongside the volume target, the company is positioning renewable energy as a key lever to reduce the structurally high electricity costs associated with iron and steel manufacturing. The message is consistent across recent disclosures: growth will be supported by a mix of export demand, capacity additions and cost optimisation.

A fresh export order adds near-term visibility in pig iron, while execution in renewables and foundry expansion is expected to lift margins over time. The company also discussed feasibility for aspirational volume growth of up to 3 lakh metric tonnes per annum, indicating a longer runway beyond near-term targets. But the pace of growth will still depend on commissioning timelines and customer demand in key end markets.

New pig iron export order: size and value

KFIL recently announced a new export order for 30,000 tonnes of pig iron. The order value was stated at about $13.5 million, which the company pegged at roughly ₹128 crore. Export orders of this size matter for a commodity-linked product because they can provide clearer shipment schedules and utilisation support, especially when domestic prices are volatile.

The order also fits into the company’s broader approach of balancing markets and managing realisations when pig iron prices soften. While the article does not detail shipment dates, the headline order value and quantity provide a concrete data point supporting management’s confidence on volumes going into FY27.

Renewable energy push to lower power costs

KFIL is finalising a renewable energy expansion plan, with projects including 35 MW of solar and 25 MW of wind power. Management said benefits should start reflecting from the second half of the fiscal year, linking the programme directly to margin improvement.

The company disclosed it is currently at about 30% green power and is pushing to commission another 35 MW of solar by July to August, and 25 MW of wind by September. It also referenced being about 90 MW of solar-equivalent capacity from wind and solar combined, and noted an existing 70 MW solar facility at Jalna that is already operational. The stated objective is to lower power costs, reduce emissions and improve the company’s positioning as a “green steel” producer at its facility.

In another update, KFIL said it commissioned a 70 MW solar power plant about a year ago and is already executing another 70 MW solar plant. It is also pursuing 25 MW of wind power through 12 machines of 2.1 MW each. These projects, totalling an additional 130 MW, are expected to be commissioned between April and September of the next fiscal year, taking total green energy capacity close to 200-megawatt solar equivalent.

Cost optimisation measures underway

Beyond renewables, KFIL highlighted multiple operational initiatives aimed at margin improvement. These include pulverised coal injection with oxygen enrichment, commissioning of a solar plant, and debottlenecking in tube plants. The company framed these steps as important to offset volatile raw material prices and improve cost efficiency.

It also pointed to ongoing projects such as waste heat recovery, and in a separate overview, referenced blast furnace upgrades including a bell-less top, along with oxygen plant and pulverised coal injection. Taken together, these measures are intended to reduce fuel and power intensity per tonne produced.

Foundry and tube capacity: Solapur ramp-up and Oliver integration

On the castings side, KFIL flagged the Solapur foundry line (Phase II) as a key project focused on auto sector requirements, including high-pressure modules. Management said ramp-up has been slower than expected due to the complexity of new product development. Even so, it expects an incremental 800 to 1,000 tons per month in Solapur in coming quarters, with full capacity expected in five years.

The company projected Solapur’s average sales at 50,000 tons this year and 62,000 tons next year. Separately, the merger of the Punjab foundry, Oliver, into KFIL is underway and is expected to be completed by the end of the current fiscal year. This integration is expected to add about 15,000 tons to casting sales this year and drive 15% to 16% growth in the casting business.

KFIL also said it plans to double the capacity of its Oliver Foundry unit in Punjab by March 2027 to meet demand from northern India. In another capex disclosure, it mentioned a plan to expand Oliver foundry capacity to 48,000 MT per annum, with ₹100 crore capex subject to environmental clearance.

In tubes, management indicated a large order execution is scheduled for the coming quarter, supporting order book visibility. The company is targeting about 15% growth in its tube business and is planning an expander mill to support volumes beyond 230,000 tons.

Financial snapshot and recent segment volumes

KFIL reported consolidated revenue of ₹1,618.0 crore, EBITDA of ₹185.9 crore and Profit After Tax (PAT) of ₹53.3 crore. It also shared segment volume trends, with growth across several key lines.

Sales volumes cited in the article include pig iron sales up 2% year-on-year to 131,508 MT, tube sales up 24% to 49,588 MT, and steel sales up 4% to 19,616 MT. The company also mentioned cumulative sales quantity growth of 2% year to date, from 3,76,000 to 3,85,000.

Capex plans and raw material cost levers

The company has planned capital expenditure of ₹500 to ₹600 crore for the current financial year, largely directed toward expanding the steel plant and adding renewable energy capacity. It also outlined wind and solar investments, including planned renewable additions and a cited ₹200 crore allocation for wind and further solar expansion.

A separate cost lever is higher use of in-house iron ore. For FY26, KFIL expects to consume at least 250,000 tonnes of its own ore compared with 57,000 tonnes in the previous year, which it said could unlock substantial savings.

Key data table

Market impact: what investors tend to track next

The company’s near-term market read-through is centred on two measurable factors: shipment execution on the export pig iron order and the commissioning timetable for renewable assets. KFIL has explicitly linked renewable commissioning to margin improvement from the second half of the fiscal year, which makes project delivery and power cost outcomes key variables.

Investors also tend to watch whether the slower-than-planned ramp-up at Solapur begins to translate into the stated monthly tonnage increase, and whether the Oliver integration closes within the indicated timeline. For tubes, the focus is likely to remain on execution of the “large order” cited for the coming quarter and the follow-through on expansion plans such as the expander mill.

Why the strategy matters

KFIL’s plan combines capacity growth with cost actions that aim to make the earnings profile less vulnerable to commodity swings. The company has pointed to price drops in pig iron and tubes, yet still indicated an ambition for 14% to 16% CAGR in value terms and confidence around operating margins (EBITDA margin) of 14% to 16% in casting and tube divisions.

The renewable energy programme is positioned as a structural cost reducer, not a one-off benefit. The company quantified solar savings of ₹40 crore in FY25 and guided to ₹70 to ₹80 crore in FY26, with wind expected to add about ₹40 crore, mainly from next year. It also said renewable additions may continue for 2 to 3 years, with a target of reaching about 65% of power from renewables.

Conclusion

Kirloskar Ferrous is entering FY27 with a stated aim of double-digit volume growth, supported by a 30,000-tonne pig iron export order and multiple capacity and cost initiatives across foundries, tubes and energy. The execution milestones investors will track include renewable commissioning between April and September of the next fiscal year, the second-half margin impact, and closure of the Oliver merger by the end of the current fiscal year. The company has also outlined a sizeable capex programme and higher in-house ore usage, both intended to improve cost competitiveness as product prices remain volatile.