KSB - KSB LIMITED Share Price

Management provided an optimistic outlook for KSB Limited for 2026, driven primarily by growth in key sectors such as energy, infrastructure, and water. The Managing Director, Rajeev Jain, emphasized that energy projects, especially thermal power plants, will be significant growth drivers. In particular, existing partnerships with NTPC and Adani are expected to contribute positively. Additionally, the nuclear sector is poised for growth with anticipated orders and approvals in the coming years, which the company is well-prepared to capitalize on.

Key forward-looking points included:

1. Revenue Target: KSB aims for a revenue growth target of approximately 15-20% in the Pump segment in 2026, based on its robust order book.
2. Order Book Growth: Excluding nuclear orders, the current order book stands at Rs.1,300 crore, which represents a year-over-year growth of about 30%.
3. Nuclear Revenue Potential: Management anticipates nuclear revenues to range between Rs.100-300 crore per year, depending on order finalization and execution timelines.
4. Solar Business Growth: The solar segment is projected to grow by 20-25% to reach at least Rs.300 crore in 2026, depending on government initiatives like KUSUM 2.0.
5. Export Market Share: KSB aims to increase its export contribution to around 30% within a few years, citing recent successes in markets like the U.S. and Africa.
6. Profit Margins: The company targets maintaining EBITDA margins between 13-14%, with the expectation that continued production improvements will help in achieving this amidst rising commodity costs.

Overall, management expressed confidence in KSB's ability to leverage its product portfolios and market positioning for sustained growth and profitability.

Q&A Section Summary

1. Question: How are you seeing trends in domestic demand and key sectors contributing? What about supply chain issues due to disruptions in the Middle East?
   Answer: I see energy, particularly thermal power projects from NTPC and others, driving growth. Infrastructure for water and commercial buildings is also expanding. Regarding supply chains, we face challenges in foundries due to gas supply issues and expect delays in exports to the Middle East but are working on alternatives.

2. Question: What part of KSB's growth in recent years has come from new products versus market growth?
   Answer: A significant portion of our growth is indeed from new products, particularly in solar, wastewater, and firefighting. These segments previously had low bases, allowing for high percentage growth as we captured market share.

3. Question: What's the status on the NPCIL orders and the test bed at Tarapur?
   Answer: Testing of the first pumps begins on March 22nd, and I will attend. Initial checks are underway, and given the management's focus, we expect to invoice 2"“4 pumps this year after a rigorous testing process.

4. Question: Why was the Q4 top-line growth modest while EBITDA margin expanded?
   Answer: The modest 7% top-line growth was due to deferred nuclear orders. However, profitability grew due to a favorable product mix, including profitable nuclear and aftermarket orders, offsetting the lower revenue growth.

5. Question: What about the Mahi Banswara tender? Any updates on its status?
   Answer: Discussions are ongoing regarding the tender, which is a high priority project for us, but no official details have been released about its structure.

6. Question: Can you quantify solar execution for CY '25 and share the impact of KUSUM 2.0 on future growth?
   Answer: Last year we achieved Rs.245 crores in solar revenue. For CY '26, we expect over Rs.300 crores, with future growth contingent on KUSUM 2.0, which encourages replacing electrical pump sets with solar.

7. Question: What is the competitive landscape for nuclear orders?
   Answer: We are currently the sole supplier for primary coolant pumps, but NPCIL is exploring adding alternative suppliers, which might diversify future orders.

8. Question: What's KSB's current export percentage and future expectations?
   Answer: Exports currently stand at 17%. While reaching 30% may be ambitious, we aim for 25% over time, considering improvement in delivery and quality.

9. Question: How significant is KSB's aftermarket segment and where can it grow?
   Answer: We're targeting a growth of 25-30% in the aftermarket segment, which now contributes around 15% of revenue. The potential for growth is substantial due to services and replacements, especially as we enter new markets like mining.

10. Question: Any news on the Jal Jeevan Mission and its impact on KSB's water pump business?
    Answer: The Jal Jeevan Mission's expansion is beneficial for us, particularly in water transfer pumps. This sector presents opportunities as we expand our product range to meet emerging needs.

This summary contains the major themes and details discussed in the Q&A session, providing insights into KSB Limited's strategies, challenges, and opportunities moving forward.