Kirl. Brothers (KIRLOSBROS)
CyclicalFairStock Score: 55/100 — STEADY
Score breakdown: P/E: 0/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 0/1
Key Financials
| Current Price | ₹1,905.5 |
| Market Cap | ₹15,131.37 Cr |
| P/E Ratio | 40.48 |
| ROCE | 27.59% |
| ROE | 19.07% |
| Dividend Yield | 0.37% |
| Profit Growth | 14.89% |
| Debt/Equity | 0.1 |
| Sales Growth | 8.97% |
| Free Cash Flow | ₹150 Cr |
| Promoter Holding | 65.95% |
| 52-Week Range | ₹1,335 — ₹2,189.2 |
| Sector | Industrial Products |
| Book Value | ₹310.3 |
Strengths
- Strong profitability: ROE of 19.07% and ROCE of 27.59%.
- Conservative balance sheet with debt/equity of just 0.10.
- High promoter holding of 65.95% aligns management with minority shareholders.
- Positive free cash flow of ₹150 Cr and Piotroski F-Score of 7/9 suggest solid financial health.
- Altman Z-Score of 4.31 indicates low bankruptcy risk.
Concerns
- Expensive valuation: P/E of 30.38 and P/B of 6.47, far above Graham Number of ₹545.93 and DCF value of ₹480.33.
- Declining recent performance: sales growth of -0.69% and profit growth of -7.23%.
- Low dividend yield of 0.44% offers little income support.
- PEG of 9.96 implies the market is pricing in growth that current earnings do not justify.
AI Analysis
Looking at Kirloskar Brothers, I'm reminded that a wonderful business can still be a terrible investment at the wrong price. The franchise here is decent: 19.07% return on equity, 27.59% return on capital employed, and a debt/equity ratio of just 0.10. The promoters hold nearly 66%, which aligns their interests with mine. Free cash flow of ₹150 crore gives some coverage against reported profits, and the Piotroski score of 7/9 suggests the balance sheet isn't deteriorating. The Altman Z-score of 4.31 indicates financial stability. But I buy value, not quality at any price. At ₹1,705, the market is paying 30.38 times earnings and 6.47 times book value. Compare that to Graham's number of ₹545.93 and a DCF value of ₹480.33 — I get no margin of safety; in fact, I'm paying a 190% premium to intrinsic value. The latest quarter shows sales down 0.69% and profits down 7.23%. Five-year revenue growth of 10.58% is respectable, but current momentum is negative and the PEG of 9.96 tells me growth expectations are far too rich. This is a cyclical industrial business — compressors, pumps, diesel engines — and cyclicals must be bought when they're out of favour, not when Mr. Market is euphoric. I would wait patiently. A better entry would be closer to book value or Graham's number, or at least when earnings stabilize and show a clear upturn. Until then, discipline demands I pass.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer