Nature of the Event

This document is a transcript of an Institutional Investors Meet conducted by KSB Limited, hosted by ICICI Securities. The meet included a management presentation followed by a Q&A session with analysts.

Management Participants

  • Mr. Rajeev Jain - Managing Director
  • Mr. Mahesh Bhave - Chief Financial Officer
  • Mr. Nitin Patil - Vice President for IPD/EPD Operations, and Chief Operating Officer, Nuclear Business
  • Ms. Shraddha Kavathekar - Company Secretary

Financial Performance (H1 CY2026 ended June 2026)

  • Revenue from Sales: INR 12,920 million
  • EBITDA: INR 1,465 million
  • Profit Before Tax (PBT): INR 1,279 million
  • The company highlighted a 17% CAGR in revenue from operations and a 22% CAGR in PAT over a historical period.
  • Return on Capital Employed (ROCE) was reported at 22.8%, or 24% after adjusting for a one-time labour code impact.
  • A dividend of 220% was declared for the previous year.

Operational and Business Highlights

Company Overview & Facilities

  • KSB India commenced operations in 1960.
  • It operates six manufacturing plants: Pimpri (IPD), Ahmednagar (Vambori Foundry), Chinchwad (SupremeServ), Coimbatore (Valves), Sinnar-Nasik (Water Pumps), and Kochi (MIL Controls).
  • A new state-of-the-art facility in Shirwal (Energy Pump Division) was started in 2017.
  • A new shed of 7,000 sqm was recently inaugurated at the Shirwal plant, increasing its overall capacity by approximately 20%.
  • The company has a widespread network including 6 service stations, over 350 service centres, 22 warehouses, and 800+ authorised dealers.

Order Intake & Order Book

  • Order Intake (H1 CY2026, excluding Nuclear): INR 15,307 million, demonstrating a 14% CAGR.
  • Order Book (as of June 2026): INR 27,445 million, described as robust and continuously growing.
  • Order intake is distributed as: Standard Pumps (51%), Engineered Pumps (14%), SupremeServ/Aftermarket (16%), and Valves (19%).

Key Growth Drivers & Market Segments

Management identified several high-growth areas:

1. Energy Conventional: Boiler Feed Pump packages, Condensate Transfer packages, Refinery/Hydrocarbon packages, and the first localized LUV boiler circulation pump order.

2. Water & Wastewater: Municipal water projects, desalination, rural water supply, and infrastructure projects.

3. Commercial Building Services: Metro rail, urban infrastructure, commercial real estate, and fire-fighting systems (Gamma range).

4. Petrochemical & Chemical: Gas separation, capacity expansion projects, and refinery process pumps.

5. Emerging Segments:

  • Marine: Commercial shipbuilding, green marine propulsion, coast guard vessels.
  • New Technologies: Green hydrogen (Magnochem pumps), railways (Etaseco), renewable energy (Movitec).
  • Data Centres: Cooling infrastructure, precision thermal management, liquid cooling applications.

Nuclear Business Update (Presented by Mr. Nitin Patil)

  • Facility: The Shirwal plant is a dedicated, 115,000 sqm, platinum-rated (IGBC) facility for energy and nuclear pumps, equipped with a 1 MW rooftop solar unit and dedicated testing beds for large pumps.
  • Journey & Milestones: KSB's nuclear journey began in 1977 with a tripartite agreement with the Department of Atomic Energy. Key milestones include complete localization of pumps for 700 MW PHWRs, acquisition of BP&CL Technology (adding reciprocating pump capability), and receiving ISO-19443 certification.
  • Order Book: The current nuclear order book stands at INR 1,235 crores. This includes orders for:
  • Gorakhpur Haryana Anu Vidyut Pariyojana (GHAVP) 1 & 2
  • Kaiga 5 & 6
  • Safety package for the Kudankulam project (some pumps already dispatched).
  • Testing & Execution:
  • Testing of the first indigenized primary coolant pump for GHAVP began in April-May 2026 but was paused due to issues with NPCIL's test bed equipment.
  • Testing is expected to resume in September 2026.
  • The pump test itself requires 500 hours and is expected to take 2-3 months to complete.
  • Post-successful testing, delivery capacity is 1 pump per quarter, potentially scaling to 6 pumps per year.
  • The standard execution cycle for nuclear pumps is 24-36 months, with deliveries to NPCIL typically occurring around 48 months from order date.
  • Market Outlook: Management cited a strong government vision to expand nuclear capacity from 8.8 GW currently to 23 GW by 2031 and 100 GW by 2047. They expressed confidence in being prepared for upcoming tenders, potentially for 8 reactors at Mahi Banswara.

SupremeServ (Aftermarket Business)

  • This business is a key focus area, operating from the Chinchwad unit.
  • Activities include warehousing spares, value/reverse engineering for KSB and non-KSB pumps, and import substitution.
  • Recent successes include orders for boiler circulation pump refurbishment and localizing descaling pumps for the steel industry.
  • The mechanical seal business is also growing post-localization.
  • The goal is to grow this business by 15% per annum, targeting a 25-30% revenue share (excluding the agricultural pump segment).

BP&CL Technology Acquisition

  • Acquired in 2023, this added reciprocating pump technology to KSB's portfolio.
  • The integration is on track, focusing on building a proven track record (PTR) with PSUs like ONGC and Oil India.
  • The business is currently at a run rate of ~INR 15-20 crores, with a medium-term target of reaching INR 40-50 crores annually.
  • An EIL approval process is underway, which requires 12 months of pump operation before qualifying for major tenders.

Challenges and Mitigation

  • H1 CY2026 Performance: Subdued growth of 2-3% was attributed to:
  • Geopolitical issues delaying export shipments, particularly to the Middle East.
  • Supply chain disruptions, specifically foundry and casting shortages due to gas availability issues, which are now 85-90% resolved.
  • Delay in the KUSUM 2.0 scheme, impacting the solar pump business.
  • Margin Pressure: Valves segment margins dropped to single digits in H1 due to commodity price inflation, product mix, and lower exports. Management expects this to be temporary and aims to return to double-digit margins.
  • Inventory: Elevated inventory levels were due to finished goods for export awaiting clearance and slow-moving inventory from the FGD business.

Outlook and Guidance

  • H2 CY2026 Outlook: Management expects a much better second half based on resolving export logistics, stabilized supply chains, and the expected launch of KUSUM 2.0.
  • Full-Year Guidance: The company is aiming for double-digit growth in both top-line and bottom-line for CY2026.
  • Medium-Term Growth: Management is targeting a 15-17% growth in value terms, driven by all key segments (Nuclear, Thermal, Water, Data Centres, etc.).
  • Capacity Expansion: Annual CAPEX is expected to continue in the range of INR 80-120 crores for both sustenance and growth initiatives.

Other Key Disclosures

  • SAP S/4HANA Implementation: The KSB Group is migrating to SAP S/4HANA in H1 of next year. KSB India will see cost allocations related to this implementation reflected in its OpEx from next year. The purpose is to gain process automation and real-time insights.
  • Royalty & APA: The company has an Advance Pricing Agreement (APA) in place for 5 years, governing royalty and license agreements with the parent company. Terms are expected to remain stable, though the proportion may increase with new product introductions.
  • Exports: Exports constitute about 15% of sales. The target is to increase this to 20%. Export margins are generally better than domestic margins.
  • Solar Business: H1 solar revenue was INR 50-60 crores, below expectations. It constitutes less than 10% of the order book (currently 5-7%), with a target of 10-12%.