Q1 2027 Kirloskar Ferrous Industries Ltd Earnings Call Transcript
Key Points
- Castings production and sales grew 19% and 18% year-over-year, respectively, driven by strong demand across sectors.
- Management expects overall volumetric growth of at least 15% for the full year, with castings and steel sales projected to grow over 15-20%.
- Capacity expansion projects are on track, including the Solapur two-part foundry (15,000 MT), Rajpura Foundry expansion (to 40-45,000 MT), and rolling capacity enhancement at Jejuri (to 300,000 MT).
- The company is progressing on forward integration by supplying fully machined components and child parts, enhancing value addition and realization.
- Pig iron prices have improved, with export opportunities (30,000 MT) supporting domestic prices, and the company expects better realizations in the coming quarters.
- Tube production and sales declined 8% and 14% year-over-year, respectively, due to subdued oil and gas demand and lower export orders.
- Power and fuel costs increased significantly (INR 58 crore), driven by higher rates and regulatory changes that reduced green power benefits and power trading opportunities.
- The company faces cost pressures from higher coal and LPG prices, with peak impact expected in Q2 FY27, and may not fully pass on costs in steel and tubes.
- EBITDA margin remained at 12-13%, below the targeted 15%, due to commodity price volatility and input cost inflation.
- Geopolitical conditions and market volatility have created uncertainty, particularly in the tube segment, with no immediate recovery in high-margin oil and gas orders.
Ladies and gentlemen, good day and welcome to the Kirloskar Affairs Industries Limited Q1 FY27 Earnings Conference Call hosted by Antique Stock Broking Limited.
(Operator Instructions)
I now hand the conference over to Mr. Pallav Aggarwal from Antics Tongbroken.
Thank you and over to you, sir.
Yeah, thank you, Shruti, and good afternoon, everyone.
A very warm welcome to the Kirloskar Ferrous Industries first quarter FY27 earnings call.
We have the senior management team of the company represented by Mr. R.V. Gumaste, the managing director, and Mr. R.S. Srivatsan, the executive director, finance and CFO.
I would now like to hand over the call to Mr. Gumaste for his opening remarks.
Over to you, sir.
Let me first of all welcome all the analysts and
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