Ladies and gentlemen, good day and welcome to the Kirloskar Brothers Limited Q1 FY26 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Before we move on to the conference, a standard disclaimer, this conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as of the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Sanjay Kirloskar, Chairman and Managing Director from Kirloskar Brothers Limited. Thank you, and over to you, sir.
Thank you. Good evening, everyone. On behalf of Kirloskar Brothers Limited, I extend a very warm welcome to everyone for joining us on our call today. I hope you've had an opportunity to go through the financial results and investor presentation, which have been uploaded on the stock exchanges and on the company's website. On this call with me, I have Mr. Alok Kirloskar, Managing Director, KBI BV, Mr. Amar Kirloskar, Joint Managing Director, KBL, Mr. Bhavesh Chhajed, our CFO and Strategic Growth Advisors, our Investor Relations Advisor. Let me begin my remarks by giving some business highlights. For the quarter, our consolidated revenue stood at INR 979 crore, reflecting a 95% decline year-on-year. The quarterly performance was impacted by adverse seasonal trends and external geopolitical factors. The quarterly and early onset of the monsoon dampened our demand for our small farm segment, which primarily serves the agricultural sector.
On a positive note, the industrial segment continued to exhibit strong demand, highlighting the resilience and strength of our diversified product portfolio. On the international front, elections in the U.S. and Thailand caused a temporary slowdown in both markets, but procurement decisions were deferred. We view this as short-term disruption, with underlying demand remaining strong. We expect momentum to improve in the coming quarter. EBITDA for the quarter stood at INR 128 crore, remaining largely stable on a year-on-year basis despite the challenging operating environment. Importantly, EBITDA margins expanded to 13% compared to 12.3% in Q1 of last year, reflecting a 70 basis points improvement. This improvement in margins was underpinned by multiple factors. A key contributor was the softening of raw material prices, which helped ease input cost pressure. In addition, our strategic focus on operational excellence continued to yield results.
We made progress in optimizing costs, streamlining processes, and improving resource utilization across all business verticals. These initiatives collectively enhanced our productivity and ensured better absorption of fixed costs, thereby supporting profitability even in a subdued demand environment. During the quarter, we recorded good order inflows in both domestic and international markets, reflecting a year-on-year growth of 9%, amounting to INR 1,336 crore. On the standalone domestic business performance, for the quarter, revenue from operations stood at INR 621 crore, reflecting a year-on-year decline of 7%. However, despite the top-line softness, we delivered strong performance on the operational front. EBITDA grew by 10% on a year-on-year basis, reaching INR 79 crore. Our standalone EBITDA margins improved significantly to 12.7%, marking an expansion of 200 basis points. This improvement was primarily driven by favorable raw material pricing and the continued impact of our cost control and efficiency initiatives.
As of June 2025, our standalone order book, excluding the small farm business, stands at INR 1,929 crore, reflecting a healthy and strong pipeline that underscores sustained demand across key business segments. In our international business, we registered a modest degrowth of 2% in Q1 FY 2026. This performance was primarily impacted by a temporary slowdown in the U.S. and Thai markets, largely due to election-related postponement. However, offsetting this softness, SPP U.K. delivered a strong performance driven by robust execution of its healthy order book. With a keen focus on strengthening our business outlook and supported by a robust order book, we remain optimistic about our future growth trajectory. Our overseas spending order book stood at INR 1,268 crore, further reinforcing our visibility and momentum in the international market. With this, let me invite Mr. Bhavesh Chhajed, our CFO, to discuss the financial performance highlights.
Thank you, sir, for the warm welcome. Good evening, everyone. Let me start with the financial performance highlights. On the revenue front, the revenue from the operations for Q1 FY 2026 stood at INR 979 crore, as against INR 1,031 crore in Q1 of FY25. On the EBITDA front, our EBITDA for Q1 FY 2026 was INR 128 crore, as against INR 127 crore in Q1 FY 2025. The EBITDA margin for Q1 for FY 2026 stood at 13%, as against 12.3% in Q1 FY 2025. On profit after tax front, our PAT for the Q1 FY 2026 was INR 68 crore, as against INR 66 crore in the last year, same quarter last year. This is all from our side. We now begin the Q&A session. Thank you.
Thank you, sir. We will now begin the Q&A session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all participants, if you wish to ask any questions, you may press star and one. Anyone willing to ask a question, you may press star and one now. We have a first question from the line of Sani Vishe from Axis Securities. Please go ahead.
Okay. Thank you for taking my question, sir. So I understand this quarter may be a seasonal thing given that we saw an earlier onset of monsoon. But is that the only factor concerning our domestic demand? And if that is the case, do we see or do we expect a clear recovery starting Q2?
Yes, good afternoon. We do expect a clear recovery in Q2. We believe that this was a seasonal phenomenon, and that should improve. It should pick up in the next quarter.
Okay, so I just want to understand because in terms of margin, this quarter is a slight improvement, but what would be the expected range of margin for the full year? I would assume it should improve further, right, in terms of EBITDA margin?
You know, I have always said that we should strive to improve margins. So we don't make such statements.
No, but directionally, I think if you compare it with Q4, I think there is scope for improvement. That's why I'm asking directionally, there is further scope.
I think you'll have to make your own judgment on that. I cannot make forward-looking statements.
Okay. Okay.
Because the record of the last few years, I think you'll have to make your own judgment.
Yeah, yeah. I can see that quarterly, there is a trend of Q4. We are going on to improve in Q4. So my question is year-on-year improvement because we improved this year on the previous same similar quarter. So that's where I am trying to go that on quarter-on-quarter, can we see continuous improvement? So I'm not asking in the Q4 in comparison to Q1, but rather maybe Q2 and last year's Q2 and so on. But anyway, I understand that you are not making a forward-looking statement. I just wanted a directional view.
Yeah. We will strive to improve.
Okay. Okay. Thank you.
Thank you. We have our next question from the line of Pratik Kothari from Unique PMS. Please go ahead.
Sorry. Thank you. So in the last call, we had kind of called out some slowdown in our cash and carry model due to some liquidity issues at the client's end. Is it past that or not yet?
Could you ask that question again? In the past quarter?
Sure. We had called out that in our cash and carry model, we were seeing some liquidity issues at the end customer level in SPB to let go of some business. Just checking, has on-ground things improved in terms of liquidity for our end customers?
You know, our cash and carry business is for both small pumps business as well as small and medium pumps business. And I think we've already said that the small pumps business, we had some issues because of the monsoon. As far as the small and medium pumps business was concerned, some of our direct dealers were affected by the issues at JJM, Jal Jeevan Mission. So yeah, we believe that that will ease out.
Correct. And can you call out what was the industrial numbers of growth for this quarter except for retail farms?
Expected growth for the quarter?
Could you repeat that question, please?
Yeah. My question is, what was the growth for the industrial segment in our standalone business? We called out that the degrowth that we saw was largely because of retail farms. So except that, how did industrials do?
Sector-wise and application-wise data. Hello?
Yeah.
I think we have explained earlier that none of our competitors competes with us all across our business lines. And therefore, we do not give certain data.
Very good. Thank you and all the best.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Raja from NMANC. Please go ahead.
Yeah. Thank you. I hope I'm audible, sir.
Yeah. There is an echo on this side, so we may ask some people to repeat. Don't hear it properly. Go ahead.
Yeah. So my first question was regarding the U.S. business. I know you mentioned in the opening comments, but if you can explain in detail what led to this slowdown in revenue, as well as I see that there is some 250 basis points margin contraction as well.
Hello, c ould you answer that?
Yeah. Good afternoon. You know, I would say that there are two aspects. Our U.S. business constitutes SPP Pumps Incorporated, which is the fire pump side of the business, and SynchroFlo, which is the package solution side of the business. And both are SPP. Fire pumps is about 55% of the overall business. So in this mix, we have seen that there are some packages that have got deferred on the SynchroFlo side because of the way the order book came about. I had mentioned, I think, last quarter because someone had asked me the question about order booking after the election. And I had mentioned that the orders had got delayed into February timeframe.
So because of that, a lot of the jobs and orders have shifted out, and they are in the third quarter for the U.S. business, which is the second quarter for the Indian business through which the numbers are reported. So I would say that shifted by a quarter, and that's caused effectively the revenue numbers to go down. And of course, with the revenue numbers, the general margin also to go down because usually we get, as you know, we've got good revenues coming out of the U.S. business, and that's also giving us operating leverage, which is what we're losing when we're not meeting the revenue thresholds. So I would say that the revenues have got shifted. I don't think there's a decline in margin. It's just because we're not getting the operating leverage at this point in time.
Maybe I'll take the opportunity to also answer another point, which may be to do with tariffs. The US business, like I mentioned, 55% of it is SPP pumps, fire pumps. That depends on products coming out of India. But usually, the product is about 20% of the overall package value. So basically, you're looking at 20% of about 55% of the business being impacted from that point of view. So hopefully, I've answered a question that you wanted an answer for and maybe one that maybe others may have wanted an answer for. Thanks. Have I covered the question properly or not?
Yes. No, no. Thank you for the detailed answer. Second question was regarding valves. So if I see a standalone order book in the PPT, so the valves section is seeing continuous decline. So last year, in the same quarter, it was around 87 crores, the part of order book. Now it has come down to around, I guess, 34 crores. So what has led to this continuous decline in the last four or five quarters?
There are some projects which they were working on which have been delayed. We are expecting to get those orders in the next few quarters. And the other aspect is they've already got some orders, but we've not really pushed them into our system. So they're still pending because of the way that the customer has, the timing of the customer when we receive the order. So this should increase in the next few quarters.
As you're aware, most of our orders are for large valves, and they come from EPC contractors. We are very careful about the commercial terms and everything matches our requirements. We do not book them into the system.
Okay. Okay. Thank you very much. All the best.
Thank you.
Thank you. We have our next question from the line of Saurabh Mehta from East Lane Capital. Please go ahead.
Yeah. Hi. Thanks for the opportunity. My first question was regarding we mentioned in our annual report regarding the new submersible turbine pumps for the petrol pumps which we've launched. So just wanted to understand, does it require some specific certifications like the UL 79 ATEX approvals? And do we already have those? Just wanted to get some clarification on those.
Yes. We have already gotten all the required approvals, ATEX and the like, because this is a petroleum application, and all compliances have been done accordingly.
Okay. So does it open up the whole market for us, the India market for us from here then?
Yes. It would. For.
Got it. Got it.
Yeah, retail petroleum application, yes.
Got it. Got it. Got it. Okay. So I had.
It will open the export market for us in addition.
Okay. Okay. So if my understanding is correct, this market was basically two international companies were having almost 80%-90% of the market. And now we'll be the third player who has all the requisite approvals, basically all the requisite certifications to be able to bid for all the orders, right?
Yes.
Got it. Thanks, Rama. The next two questions were for Alok. One was on the service business in the U.K., the Thames Water opportunity. How is it progressing? If you could give some update on that.
I think the service business in the U.K. is, like I mentioned, when you mentioned Thames Water, we have general framework contracts across most of the U.K. water utilities. There are about 10 or 12, depending on how you count them based on the subsidiary-parent relationship. But we have a framework with most of them. And at the moment, as I mentioned last time, we are starting AMP 8, Asset Management Program 8, which started two months ago. Each AMP cycle, as I had mentioned earlier, lasts for about five years. So we are in the 40th year, starting the 40th year of the AMP cycle. Usually, the first year of the AMP cycles have not been the best because companies are still evaluating their budgets and not spending all the money.
They tend to be better going towards the second, third, fourth, fifth year, and of course, towards the end of the cycle, as we've seen till now. Of course, at the moment, but given the scenarios, and as you know, with Thames Water teetering on bankruptcy and maybe rescued by the government, generally, the U.K. has been looking closely at how the U.K. water utilities have been using the subsidies they've been giving via the AMP cycles. And so we expect this time that there should be better spending. As you probably know, because it's available online, the AMP 8 cycle is supposed to be GBP 88 billion in total spend. So I would say that it's still early in the cycle. We are not seeing heavy spend on the service or the CapEx side as yet on AMP 8 because it just started, like I mentioned, two months ago.
But since you asked me general service, I would say that general service in the U.K., while it has been strong, there are some things that have been worrying us over the last few months. One is with the high power prices. You would have seen that Jim Ratcliffe, who's a billionaire who owns INEOS, which is a large chemical company in the north, has said that they are looking to close down a lot of their chemical plants. So as an example, we have a huge framework contract with INEOS. And if they close down their plants because one of the reasons, of course, is net zero. With net zero, power prices have gone up three times in the U.K.
A lot of heavy manufacturing, whether it is steel plants, chemical plants, they are sort of in a very difficult scenario, and many of them are closing down. I would say that that deindustrialization of the U.K. because of these policies is definitely an area of concern for us. We are seeing a little bit of a slowdown on existing framework contracts. At the same time, in line with net zero, there have been no renewals of the North Sea operations for many companies, for their offshore platforms, because the Labor government is right now wondering whether they should or they shouldn't renew them in the context of net zero. Again, because of that, there is a confusion on the operators whether they should move into decommissioning mode of all those rigs, which, of course, as you would expect, would further enhance the power prices.
So given that scenario, I think it is a bit of a concern. We are keeping a lookout in terms of what happens. And so we do see reduced spending on existing framework contracts because there's not much happening on the sites. But that said, we have added new contracts in power stations and other areas. So we are trying to offset that as much as possible. Does that answer your question?
Yes, yes, yes. Absolutely. So one more thing, Alok. So Rolls-Royce has won that SMR competition, the Great Britain Nuclear. So how does it progress from here for us, and how large and important opportunity could that be?
So we are approved by GBN, and we are currently being approved by some of the large manufacturers of SMRs in the U.K. So from that point of view, I think it is positive. Also, as you probably know, GBN requires almost 60%-70% U.K. content for the SMR program in the U.K. So I would say that is also a positive from that point of view, given that we are Britain's largest pump manufacturer, and we have a good reference base in power plants. And of course, as you know, KBL, which is the parent company of SPP, also has a good reference base in nuclear power plants. So I would say that if you look at all those together, we are quite well positioned for the SMR opportunity through Great Britain Nuclear, which is GBN.
Got it. Got it. So just to follow up on that to the India business, as you mentioned, so are we approved suppliers for primary cooling pumps in India? And we're expecting some large orders from NPCIL for the fleet orders. So are we approved for the primary cooling pumps?
Saurabh, as I've mentioned earlier, we did receive a development order a few years ago. We restarted work on that, and we are well within the delivery schedule. It is my expectation that the Indian nuclear program, if it has to replace the fossil fuel stations, will be so large that a lot of players will have to be allowed to come in. So we believe that we will be one of them when the orders are to be released.
Got it. Got it. Got it.
I think I've already explained that the development for the primary development order that I spoke about just now was for the primary heat transport program. There are many other pumps, some which we are working together with NPCIL to ensure that we are able to participate. So we are funding some of these pumps. Two or three types of pumps which are required are self-funded because we want to ensure that these pumps, when they are required, we do get some of the orders. For the rest of the pumps, whether it's heavy water, fast breeder, I think we have all the approvals required to participate in the program. We've also developed the boiler feed pumps and delivered the orders to RAPP. These were the first Indian-designed and manufactured boiler feed pumps for the Indian nuclear program.
Got it. Got it. Got it. So my last question was regarding a general capital allocation, that how do we plan to use the cash on the balance sheet? Given we have so somewhat been quite keen at expanding our service business, especially internationally, could we look to acquire a business there, or are there any other areas which we are looking at to use the cash on the balance sheet?
This question was asked the other day in the shareholders' meeting as well. Whenever there's a good opportunity, that opportunity will be taken, and that opportunity, obviously, the board of directors will have to look at to take it forward. But yeah, there is a large amount of cash sitting in the balance sheet, which gives us the liberty or the opportunity to spend it either on CapEx, either on improving operational efficiencies, or to grow organically and organically.
Got it. Got it. Got it. Thanks. Thanks a lot for answering all the questions. Thank you so much.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Nishit Master from Axis Securities. Please go ahead. Nishit, are you there? Nishit, are you there? We'll move on to the next question from the line of Vishal from Bandhan AMC. Please go ahead.
Hi. So my question is on the standalone business. Could you elaborate a bit more as to what were the issues that we faced because of which we saw a year-on-year decline in revenue?
So I think there were a couple. For the retail business, it's a seasonal business. So because of the monsoon, we did see a dampening of sales in rural India. For our KOV business, there were some orders that did not go out, and that's one of the reasons for the lower sales this quarter. And as Chairman had mentioned earlier, there were some dealers in the KOV distribution network that had cash stuck with the JJM projects, and that's one of the reasons why there was less cash for us in the market. So these were some of the reasons why our sales declined this quarter. I hope that answered your question. Hello.
Vishal, are you there? Vishal? Vishal, can you hear me? We'll move on to the next question. We have Nishit back in the line. The next question is from the line of Nishit Master from Axis Securities. Please go ahead.
Yeah. Thank you for taking my question. Am I audible?
Yeah.
Yeah. So, sir, two questions. One, if you could quantify the loss of business from Thailand and the U.S. because of elections, percentage or amount, if it was a normal quarter, if you could quantify that?
I don't think there's a loss of business. Like I mentioned, the sales have shifted, but our order book position continues to be stronger than last year. So executable order book position is stronger than last year. So I don't think that anything will come back.
Yeah. So this revenue will come back in, say, Q2 or Q3?
Yeah. It will come back in their Q3 and KBL's Q2.
Yeah. Okay. Thank you so much. And second, sir, in the U.S. business, you mentioned about the impact of tariffs, especially for material which we send from India. The other part of the business where we have local manufacturing. Now, over there, also, a lot of primary material might be coming from, say, other geographies, including, say, metal and things like that. And there have been a greater amount of duty, even for material which is, say, coming from Mexico or Canada. Have we taken any hit because of that? Because there would have been an increase in cost of production, so have we been able to pass on that increase in cost of production, or have we taken some hit because of the entire supply chain facing some tariff issues?
No, Nishit, I think in the other part of the business, that is more fabrication-oriented. And the remaining components, which also include pumps, but pumps are a percentage of the total package, in that case, maybe only 5%-7%. Like I think we've talked about in various other conferences, these are the large package solutions where we supply the entire pump house, which is pre-packaged in our facility and dropped off at the site. And these include solutions, like I mentioned, for data centers, as well as large booster pumping schemes for city municipal water requirements. So I would say the remaining components are mainly U.S. sourced, including the sheet fabrication for the steel plates for the steel. So I would not say that that is vastly impacted. But yes, of course, the pumps come from India even for that. But it's a very small portion, like I said.
It's 7%-8% of the total value of the product. So it's less impacting from that point of view.
So is it fair to say that we are in a far better position than other competitors in the U.S., and thereby there is a chance of us actually gaining market share in the U.S. now?
I mean, I would like to think we're in a better position, but nobody else is a fool either. I'm sure there's edge of their supply chain away from China and other places. But we would not know that until we wait for maybe a quarter or two quarters because, obviously.
I'm just taking base tariff of 15% for, say, most other economies, right? The base tariffs have been 15% for most of the guys. Even that 15% for the entire 100% of import content would be significantly higher than us facing, say, a 25% tariff on 20% content.
Yeah, possibly, and also, I mean, it's important to note most of our large competitors and the large manufacturers in America and pumps normally get their pumps from either China or from Vietnam, as an example. Of course, some make them in America as well, but I would say those are the main sources for them, so if you ask me off the cuff, I would hope that we're in a better position, but I cannot imagine that any of them are foolish, so I'm sure that they also have redundancy in the system, so we would only know the real scenario probably one or two quarters down.
Done, sir. Done. Thank you so much and best of luck.
Thanks.
Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Balasubramanian from Arihant Capital Markets, please go ahead.
Good evening, sir. Thank you so much for the opportunity. So my first question, the new subscription-based model aims to replace traditional AMCs. So what is the adoption rate and what percentage of service revenue contributes right now?
If you look at KirloSmart, it is being adopted by more and more people. Like I said earlier, we do not give revenue figures or growth figures sector-wise or business-wise.
Okay, sir. So on that, Dutch entities, it's been negative margins in this quarter. Is this yet temporary issues like project delays or any structural issues like pricing pressures? And what kind of specific measures are being implemented to improve the profitability, especially product mix or cost cutting? You could throw some light on that.
Hello?
Yeah. I think last year we mentioned that they've turned around the Dutch entity, and the order book is still very strong for the Dutch entity. It's mainly execution of the jobs that are happening in the current quarter. We expect that as they execute their jobs based on the existing order book, they should be in a much better position, so I mean, we are really focusing on that aspect during the day executing the job.
So my last question is SPP U.K. service side. And are they expanding beyond pumps like gearboxes, compressors to offset de-industrialization in Europe?
Yes. I think in the last call, I had mentioned that already where we have sites under control, we have moved from just pumps to gearboxes and, of course, in some cases, engines. We have not yet moved to compressors and steam turbines, but that's how we see the progression in terms of service. So yes, where possible, we have added more and more items into our mix. And that is our objective also.
Got it, sir. Thank you.
Thank you. We have our next question from the line of Rabindra Nath Nayak from Sunidhi Securities. Please go ahead.
Thank you for the opportunity. Sir, you mentioned that this quarter, there is a decline in the retail pumps, small pumps segment, due to which sales have declined. So first question, what is the status right now in this quarter so far, in this particular quarter so far? And does it explain that your YOY, the standalone margin, has increased from 3.7%- 4.7% margin? And also gross margin has expanded. So does it explain the industrial contribution is higher, the margin is higher?
Yes, that's two answers. Well, I can't answer your first question because that would be a forward-looking statement. So I will refrain from doing that. But yes, our industrial growth was good, and that was one of the reasons why you see the increase in margins.
Okay, and about the industry and idea of what is the status so far in this quarter, whether it is kind of, does it come back or it is remains status quo, what is that? You can give some idea about that on the retail side or small pump side.
We do see the cash situation improving in the market. That's about all that I can tell you.
Okay, and so what is the service contribution in the subsidiary business, non-standalone business in this quarter?
What is the contribution of what?
Services business, particularly. Services contribution in the subsidiary business.
We don't disclose the service business contribution as well. But the subsidiaries, I think the subsidiary numbers are given in the presentation very clearly.
Okay. I understand. I would just say, because YoY, the margin is shorter, whether services contributed fairly as expected last year or it is some disappointment there in the service contribution. That is the only thing I'm asking for.
It is in line with last year.
Okay. Okay. Thank you. Are you asking domestic business or international business?
International business. The international business is a little less than last year.
Okay. Thank you.
Thank you. A reminder, if you wish to ask any question, you may press star and one. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Saurabh Mehta from East Lane Capital. Please go ahead.
Yeah. Hi. Just a couple of more questions. So one was in the data center opportunity in the U.S. How is it coming about? If you could just talk about it, how large could it be and key clients we are able to crack in the last few months? Just some update on that.
I think last time we spoke about this in terms of data centers, we had mentioned that usually in data centers, we supply the cooling package, which normally are the primary, secondary, or primary and secondary both. What we don't supply is the on-chip cooling package, which is a separate package with some manufacturers who supply. And the third package that we supply is the firefighting crate. I had mentioned also the last time that we have moved from just supplying pumps to supplying containerized systems. And that's really what we're focusing on with the plug-and-play scenario for all these packages. So at the moment, apart from having the framework agreement, like we've said, with Amazon, people like Google, Microsoft, as well as Facebook, who is called Meta, we mainly supply them project to project. The only ones we have a framework with are Amazon.
The other point is that we've also now slowly added a lot more companies, like as an example, Equinix and others who are more private equity oriented because we are seeing now slowly more and more private equity companies are coming in and doing work in data centers because data center cash flows are utility-style cash flows. So slowly we're adding those companies in as clients. So I would say the opportunity is basically supplying these two to three major packages. Usually, these two to three major packages, if you go by package value, would be around together, would be around $5-$7 million per data center, and I think you can probably get from anywhere the number of data centers coming up, but of course, there are many, many, many data centers coming up in the U.S. as well as in Asia.
So I would say that that probably sums up my thoughts about data centers. Do you have anything specific you want to ask, or do I kind of covered all the points?
No, this is very good. So for example, if we are suppliers to Amazon, and it could be to other geographies as well, right? Not just be limited to U.S.
I mean, to be fair, majority of the data centers, as you know, are coming in the U.S. by far and away. The other countries have been talking about data centers, but the number of actual data centers on the ground is limited. But yes, to answer your question, we do have Amazon data centers in Europe. We have Google data centers in Europe as well, places like Sweden and other places like that. So we do supply to them, but in terms of a single market with the largest opportunity, I think it's still the U.S. when it comes to data centers.
Got it. Got it. Would it be fair to say that this business in the U.S. sub would be probably the highest growing segment?
For us in the U.S.?
Yes, yes.
Yes, yes. I mean, it would be because, I mean, as you know, the countries that we operate in, whether it's America, the U.K., Europe, as an example, the growth rates are very slow in the very lowest of these countries these days, any growth at all. The U.S., of course, there's been growth recently. But so really, the growth for the international business comes from focusing on some of the bright spots in the economy. And like you said, data centers are one of the bright spots. So yes, a lot of the growth would come from these kinds of new areas of growth.
Got it. Got it. Got it. And I had one more follow-up question on the domestic business on the fuel pump opportunity. Is it possible to understand the sales cycle of how this business works? How much is the greenfield? How much is the replacement cycle? And how large can this opportunity be in domestic? And also some color on exports, which geographies are we targeting?
So we have just finished our development supply of this order. So we will need to wait for another six months to really understand the size of this opportunity.
Got it. Got it.
It's too early to tell as of now.
Sure. Thank you.
Thank you. We have our next question from the line of Prolin Nandu from Azeris Public Alternatives. Please go ahead.
Yeah. I think thank you for giving me the opportunity. My question is on order book, right? And for that matter, then on slide 10, right, where you give the breakup of the order book and in that order received, right, if I look at the KBL and domestic subsidiary number, the order book is down here on your right, order received, right, INR 932 crores versus INR 943 crores last year in the same quarter. While I understand that there could be quarterly fluctuations, and in the last call, you also mentioned that you don't want to sit on a very large order book, right, because execution timelines maybe are coming down. But is there anything specific that you want to call out for a degrowth in order receipt number for the domestic business, or is it business as usual?
Even, let's say, compared to last year, are the execution timelines coming down? How should one think about the timelines for the orders that you are receiving, let's say, in the recent quarter?
This is business as normal. The order intake fluctuates from quarter to quarter based on customer requirements. All I can say is we haven't lost any orders that we have been quoting for in the last one year. It's more dependent on seasonality. It is dependent on how customers place orders on us. Some quarters, you'll see large amounts of orders. Some you may not. The number of pumps that we are delivering, as we've said, is ever increasing. And also, as we have explained earlier, a large number of pump sets have now gotten converted into pumps. So it's a combination of all these factors that you are seeing not only affect the top line, but also the bottom line and the balance sheet.
Sure. I get your point. Similarly, in your overseas subsidiary, right, there the order receipt has increased quite a lot, right, on a year-on-year basis. That also is largely business as usual, or are there certain orders that you have probably received which could be lumpy in nature, or is it more just the reason that you gave for the domestic business? Is it similar for the overseas business as well?
Hello?
No, actually, yeah, no, actually, I would say that the international business, I mean, yes, there are some lumpy jobs, but generally, like I mentioned earlier, with a lot of the headwinds that are being faced in Europe and also U.K., I would say that those jobs that they have got are probably lower than what we would have expected to get because obviously there's a reduction, like I mentioned, in terms of the available service business also because of just the industrialization taking place in the U.K. and some other countries due to power crisis. So I mean, that's what I would say, really, that it could have probably been in a better scenario if the markets were stronger. Sure. And one question on margins, right? While you, again, answered two previous participants' questions that there is a mixed impact here, right?
But if I look at, let's say, recent 12-odd quarters, your gross margin are the highest, right, in the recent 10 to 12 to 14 quarters. So is the entire gain that you have probably seen in gross margin on a year-on-year basis explained by the mixed change? Or some of the gains that we have talked about on the previous call on the production side, on the efficiencies that we are working on at Kirloskarvadi, are those also the reason why gross margins have jumped, right? Because I understand that maybe overall revenue is down 5%, and that might have some impact on EBITDA margin because of lower scale. But on the gross margin side, is it purely the mixed impact, or are there some efficiencies which we are also seeing, and that's what is visible in margins?
It is a combination of all the factors you mentioned. It's product mix as well as the operational efficiency improvement.
Okay. Thank you, team. That's it from my side.
Yeah. The only thing I'd like all the participants to understand is, I mean, and I've been saying this for quite some time, we not only are very selective with orders, but we also recognize orders only after they meet all our conditions, right? So there may be orders that customers have placed on us, but we haven't fully brought them into our system.
Got it. Thank you for the clarification.
Thank you. As there are no further questions from the participants, I now hand the conference over to Ms. Rama Kirloskar for closing comments. Over to you, ma'am.
Thank you. We thank everyone for joining the call today. We hope we've been able to give you a detailed overview of our business and answer your queries. Should you have any further questions or clarifications, please feel free to reach out to SGA, our investor relations advisor. Thank you.
Thank you.
Thank you.
Thank you. On behalf of Kirloskar Brothers Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.