Q4 25/26

Apr 27, 2026

Summary

FY26 delivered record bookings, income and PBT, with EBITDA margin at 21.7%; management views 18%-20% as sustainable. A larger order book and product launches support a long-term 20%+ growth target, despite geopolitical and execution risks.

Ladies and gentlemen, good day, and welcome to the Kirloskar Pneumatic Company Limited Q4 FY 2026 Earning Conference Call hosted by Antique Stock Broking Limited. As a reminder, all participant lines will be in a 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 a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Dhirendra Tiwari from Antique Stock Broking Limited. Thank you, and over to you, sir. Good evening. On behalf of Antique Stock Broking, I welcome you all to Q4 FY 2026 results conference call. I am pleased to have with us today Mr. Aman Kirloskar, Managing Director, and Mr. Ramesh, CFO, along with the management team. As you are aware, the company continues to deliver long-term growth. Congratulations to Mr. Aman and team Kirloskar Pneumatic. All the best for future. Now I invite Mr. Aman Kirloskar to discuss results, post which we can take the Q&A. Over to you, Aman. Thank you. Thank you, Dhirendra. Thank you all for joining the call today. I have with me Mr. Ramesh Birajdar, the Chief Financial Officer of the company, and Mr. Jitendra Shah, the company secretary. Before proceeding with the business updates, I kindly ask Mr. Jitendra Shah, our company secretary, to read out the disclaimer statement. Thank you, sir. And good evening to all. The presentation uploaded on the website of the company and discussion on the financial results during the earnings call may contain statements relating to future business development and economic performance that could constitute forward-looking statements. While these forward-looking statements represent the company's judgments and future expectations, a number of factors could cause actual developments and results to differ materially from expectations. The company undertakes no obligation to publicly revise any forward-looking statements to reflect future events or circumstances. Further, investors are requested to exercise their own judgment in assessing various risks associated with the company and also the effectiveness of the measures which are taken by the company in tackling them, as indicated during the discussion. Thank you. Thanks, Jitendra. Let me start by wishing all of you a very happy and prosperous new financial year. FY 2027 has begun, and it is a good moment to reflect on where we have come from and set the context for where we are going. I would like to highlight a few key points of FY 2026. During the year, we had the highest order booking of more than INR 2,000 crores. We declared the highest total income of INR 17.86 billion and the highest PBT of INR 356 crores. We developed a couple of new products, including the Zephyros air conditioning package, providing a competitive edge in a new business segment. We also declared the highest dividend of INR 12 per share, which is 600% on face value of INR 2. During the last financial year, we made meaningful progress on our long-term goals despite external uncertainties. The domestic market remains strong, with significant performance in the food, dairy, chemicals, fertilizers, and general engineering sectors. While oil and gas lagged due to slower order finalization, we saw momentum begin to pick up in the last quarter. Additionally, products such as the Tezcatlipoca centrifugal compressor and the Khione refrigeration compressor continued to gain market share. Coming to innovation, we have made significant progress on development of several cutting-edge compression solutions, represented by our highest-ever IP filings of 57 for the year, taking us to over 128 IPs filed. In recognition of this, KPCL has been awarded a top 30 IP-driven organization by CII. We launched our oil-free air compressor, Hydrino, and we are quite happy to note that we have even booked a few orders for these. For the year, we also launched our Tyche semi-hermetic compressors, which we have also sold. Our Zephyros air conditioning package will be commercialized in the market in the first quarter of FY 2027, as we are still doing some fine-tuning to compact the design and reduce the cost. However, the units that we have installed in our Hadapsar office at Saswad factory are running very well. Our enablers remain robust and well-aligned with our values and culture. In recognition of our best-in-class HR practices and policies, we were honored with the HR Excellence Award from the Institute of Directors. Our PBT last quarter was also significantly elevated. This was made possible by all the enablers we've been working hard on for the last few years. Our in-house capabilities, which allowed us to offset inflation to some extent and resulted in higher margins. We also took a measured approach in markets with lower margins, like boosters and screw compressors, and did not get into any price wars here. If we could get an order with the margins we wanted, we took it, and if not, we let it go. Lastly, we focused on less contested spaces based on our own IP and import substitution, which also helped push up margins. While this quarter and year has been good on the margin front, we would like to caution that this year would be a bit of an exception. A margin expectation of 18%-20% EBITDA would be more sustainable. While we always strive for higher margins, we must also consider the impact on growth and find a balance. Now coming to our business units. The air compressor division, the year was good for the Tezcatlipoca centrifugal compressors, which continue to take market share. Aside from our key sectors of metals and power plants, we have also managed to get some orders from sectors like pharma, tire manufacturing, and textiles during the last financial year. Our range of reciprocating compressors also did well with orders for gas compressors hitting record highs. Screw compressors were a laggard the last year. ACD remains to be roughly 18%-20% of our business. On the refrigeration side, the business delivered a strong performance during the year, achieving record high volumes for our KC/KCX compressor range. Khione sales also continued to pick up and gain more acceptance in the market. We executed several large packages this year, some of which went out in Q4. The business is roughly 40%-45% of our total business. Coming to process gas systems, as we had previously mentioned, our decreased dependence on PGS has de-risked our reliance on large oil and gas orders from the Middle East. However, our O&M business is expanding. We currently manage over 1,000 CNG stations across India, reflecting an increasing trend in this segment. While current gas shortages have not yet impacted the CNG market and order booking remains active, we continue to monitor potential future effects. The gas system division performed well this year, and the outlook remains positive. We expect the geopolitical situation in the Middle East to drive demand for domestic exploration and upstream gas projects. Furthermore, there's a renewed interest in alternative fuels, and Kirloskar is well-positioned to capitalize on opportunities across various sectors, including biogas, hydrogen, and coal gasification. PGS contributes roughly 35%-40% of our business. We have also established a new business unit in the last financial year, which is Precision Engineering Division. We have established this division to leverage our manufacturing capacities and capabilities, including forgings, castings, and precision machine components at our Nashik and Hadapsar facilities. Please note that this is a non-reportable segment for FY 2026. Given the renewed interest in specialized manufactured products, we believe our unique capabilities are well-positioned to drive growth. While we have secured several orders in this segment and we are currently in the execution phase, we would avoid talking too much about this business until we are clear that this is sustainable and not one-time in nature. Coming to the outlook, despite the challenges of the past year, including delayed package orders and late finalization of large contracts, we believe we remain well-positioned to deliver strong growth ahead. The current geopolitical climate has increased demand for exploration and upstream packages alongside rising interest in alternative fuels like biogas and hydrogen. We offer established solutions for all of these segments. Furthermore, our core revenue-generating sectors, including oil and gas, food, dairy, chemicals, and power, are all expected to grow. Our localized supply chain and focus on Make in India import substitutes insulate us from many geopolitical risks and provide a competitive advantage. We continue to invest in unique in-house manufacturing capabilities that will further strengthen our market position. With our strong order board and a substantial volume of active proposals entering the new financial year, we are confident in achieving our growth objective of 20%+. Now I will request Mr. Ramesh Birajdar, CFO, to take you through the financials. Good evening. The presentation outlining key trends observed in Q4 and FY 2026 results has been uploaded to the investor section of our company's website. Additionally, following today's board meeting, the financial results have been duly filed with the BSE and NSE. These disclosures provide comprehensive details on the company's performance. Quickly, I will run through the business results for Q4 and the year ended on March 31st, 2026. Sales for the Q4 FY 2026 were INR 706 crore against INR 503 crore of Q4 FY 2025. Sales for Q4 also showed a growth by 21% over the previous year, Q4 FY 2025. Other income for Q4 is almost same for both years, INR 6 crore in FY 2026 against INR 5.7 crore in FY 2025. Total income for Q4 FY 2026 was at INR 712 crore compared to INR 588 crore in the previous year. There is major reduction in the percentage of raw material to sales for Q4 FY 2026 compared to Q4 FY 2025, 50.06% in Q4 FY 2026 against 56.35% in Q4 FY 2025. However, the YTD percentage of raw material to sales has improved by 3.1% in FY 2026 due to better product mix, better selection of orders, execution of large packages, and overall cost-saving efforts on account of backward integration of manufacturing in Nashik as well as in Hadapsar plant. Staff cost, that is ERE, stands at INR 53.1 crore in Q4 FY 2026, that is 7.5% of total income, against INR 45.5 crore in Q4 FY 2025, that is 7.7% of total income. Employee-related expenses for the year to date, INR 200 crore, representing 11.2% of total income as against INR 177 crore, that is 10.7% in FY 2025. This rise is driven by salary increment and increased headcount. Company has incurred over INR 165 crore in last two years, leading to increase in the depreciation to INR 31.1 crore in FY 2026, as against INR 28.9 crore in FY 2025. We continue to invest in CapEx to support growth and to meet our commitment towards new product development under the PLI scheme. YTD other expenses are mix of fixed and variable costs and are at INR 326 crore in FY 2026 against INR 308 crore in previous year. Increase in these expenses are mainly sales and execution of large packages, enhanced level of after sales business, growing O&M business, and expanding activities around Nashik and Saswad plant. The year-to-date performance for the current year shows an improvement in the EBITDA margin, reaching 21.7% of total income to INR 388 crore, compared to 19% of total income to INR 313 crore in the previous year. The YTD profit before tax has reached INR 356 crore, constituting 19.6% of total income, against 17% to INR 284 crore in the FY 2025. Net profit after tax for FY 2026 is INR 258 crore. That is 14.50% of total income. In comparison to previous years, INR 281 crore, that is 12.8% of total income. Company has maintained the status as a debt-free company, and I would like to state that company has still net cash position of cash and cash equivalent of about INR 460 crore as on April 4th, 2026. The board of director has approved subdivision of equity shares of face value of INR 2 into face value of INR 1, subject to approval by the shareholders. The company issued 60,800 equity shares during the year FY 2026. Previous year, 124,300 shares issued under the employee stock option program. As a result, there is marginal increase in the paid-up share capital to INR 12.99 crore against last year of INR 12.98 crore. YTD earnings per share, that is EPS, for FY 2026 has shown growth by 22%, reaching to INR 39.80 per share, while INR 32.50 per share was earning in the previous year, FY 2025. In line with our dividend policy, the board of directors has approved a final dividend at the rate of 425% on the face value of INR 2 per share. That is INR 8.50 per share. This is in addition to payment of interim dividend, which is already paid at the rate of 175%, that is INR 3.50. So the total dividend for FY 2026 is 600%, which is highest in the history of the company. Final dividend is subject to approval by shareholders. With about 93.4% of total income coming from the compression segment, it remains only reportable segment, and segment earned operating profit of 24.9% in FY 2026, higher than the previous year when it was 21.7%. The compression segment showed a higher profitability. This is being a one-timer for Q4. However, as indicated from time to time, our compression business margins are sustainable in the range of 18%-20%. As of April 1st, 2026, the company's unexecuted order book amounting to INR 1,863 crore and increased by 15% from INR 1,624 crore recorded on April 1st, 2025. Net unallocable assets are including corporate assets and assets of Precision Engineering Division to the tune of INR 834 crore. Exceptional item regarding the implementation of the new labour code that become effective on November 21st, 2025. We have completed our current assessment. The estimated reserve provision has been reduced by INR 4.2 crore in Q4, resulting in total provision of INR 14 crore for FY 2026, which is pertaining to the prior period, while the impact of FY 2026 is recorded in ERE cost. Comparative statement of consolidated business for Q4, as well as for the full year, are also published. We are working on reorganizing the restructuring of our subsidiary to get the results expected, projected while acquiring the company. This will take some time to get positive results from our subsidiary company. Before I conclude, I would like to place on record my sincere appreciation for our teams across operational, finance, supply chain, and sales and marketing, whose relentless focus and disciplined execution continue to drive our performance. I would also like to extend my appreciation to our chairman, Mr. Rahul Kirloskar, the board members, and our investors for their continued trust and support as we work towards building a stronger, more resilient, and future-ready organization. I would also like to acknowledge Mr. K. Srinivasan, former managing director, for his constant encouragement and for shaping the company's mindset to embrace challenges and pursue ambitious growth. Thank you so much for joining today, and we'll now open the floor for questions from our investors. Thank you. We will now begin the question and answer 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 handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Priyank Chheda from Vallum Capital. Please go ahead. Yeah. Hi, team. I have just two questions. First, on the order book, would you want to call out the book-to-bill or, say, execution cycle which has shortened significantly versus past few years? Just trying to match and map what would be the executable order from the opening order book that we have from as on 1st April. And Ramesh, just a clarification, in this order book, have we included the Precision Engineering Division orders? If yes, then would we be able to quantify that? Okay. And second question? I will ask that question after this question is answered. This 1,863 crore order book as on 1st April is inclusive of Precision Engineering Division business, and out of this, roughly 500 crore is executable beyond FY 2027, and remaining it is executable in this year. We are continuously focusing on the equipment business where it is a touch and go, where roughly the 600-700 crore business, we get it during the year, we execute, and we dispatch for the sales. Okay. Which means that out of 1,860 crore executable order book, 500 crore order book is beyond one year, and the Yes balance 1,300 crore is minimum executable within, say, less than one year. Yes. This is what a similar trend what we have in last so many years. Understood. My second question on the products and high hope products that we had as a strategy to scale up the revenues. Yes. First is Zephyros. What would be our, say, GTM strategy? Because I understand that FY 2027 would be CapEx year, and FY 2028 is where the full-fledged sales starts. If you can just touch upon the sales strategy that we plan to deploy to scale up this and what are our ambitions in terms of scaling up the sales. Second would be on the centrifugal Tezcatlipoca compressors. If you can first just call out FY 2026, how much is the sales units that we have achieved? What are the sales targets for FY 2027? Maybe Aman can touch upon just any other products that we should hope to achieve large sales numbers and have larger sales contributions coming from any other new innovations that we are planning to launch. Thank you. Yeah. Thank you. I will start with the Zephyros. Just to reiterate, Zephyros is a fairly innovative air conditioning package which uses a green refrigerant and is significantly more efficient than, let us say, traditional chiller systems. Our go-to-market strategy here would really be engaging with all the stakeholders whether that is consultants, architects, installers. Probably before that, in this financial year, we do have a target for how much we wish to sell. This would be done largely by interfacing with builders and finding the right target markets for this. Probably the ideal markets as of now with our current range would be smaller machine shops and small restaurants, banquet halls, et cetera. There is quite a large potential for Zephyros, and we will slowly build out a channel as we get more volumes. On the Tezcatlipoca, we have about 130 machines in the field, of which 85 have been commissioned. I hope that answers your question. Any other product which you think should be focused going ahead as a large part of sales target? If you remember, Priyank, last few minutes, the indication is we are switching towards the equipment business where the execution cycle is very shorter period. Our target is to take out something 20% to 25% business coming out of this equipment business where the execution cycle is very short. The same trend will continue because Tezcatlipoca, Khione, Tyche, then again, the Zephyros, all this is part of equipment business and our equipment business we just touch in, we just get the order, execute, and we dispatch. That focus we are increasing, and that increasing focus will be sustainable over the period of next few years. Thank you. Thank you. The next question is from the line of Balasubramanian from Arihant Capital. Please go ahead. Good evening, sir. Thank you so much for the opportunity. Sir, on the Zephyros side, you mentioned ideal markets with smaller machine shops and restaurants. I am trying to understand in this business how we are. I think our current PBT is around INR 357 crores. We have committed CapEx of INR 320 crores. I am trying to understand whether these are the small orders we can get hence across. How do you look at ROCE and payback period of these INR 320 crores investment? Whether we can expect substantial contribution from FY 2027 or FY 2028 onwards. Okay. The INR 320 crore is a commitment for the PLI scheme, what we did. We developed the product. One is Zephyros, that is air conditioning package. The second is the motor. Again, it is developed. The Zephyros, two packages we already installed. One in the Saswad canteen and one office in Hadapsar. Both are absolutely running very fine. There is no issue in the air conditioning package. This Zephyros system is giving another opening for our new business segment. So far, we are into the refrigeration business with the KC, KCX and all other products. Now we are entering into air conditioning, and that is the comfort. That business will grow, and that is why we are focusing on that. For the Zephyros, the backward integration will be in the form of motor, in the form of heat exchanger, and in the form of sheet metal components. Some of the activities we planned in the Saswad plant and some of the activity we planned in the Nashik plant. Out of the INR 320, roughly INR 60 crore we already incurred for this, and remaining, we are targeting to incur in another 2 years' time. The commercial of this Zephyros will happen in Q1. We have a separate team for this working, along with appointment of the dealers, appointment of the team. The express team, we are already on the board, and the team is working to execute the Zephyros now. Sir, on that payback period and ROCE side, whether we can expect 25%-30% kind of margins since it is small orders for. Yeah. Yeah, sorry. In this segment, considering that it is a highly competitive segment, we probably will not be targeting those kind of margins. However, we will try and target very high volumes. These are volumes which KPCL generally has not done. So on the margin side, it may not be as high, but on the volume side, it should make up for it. Okay, sir. Sir, my second question. I think earlier we have mentioned incremental capacity for Tezcatlipoca will be available from Q1. Whether all the machines we have installed for this segment. Secondly, what is the current order pipeline for the new A800 smallest centrifugal frame? So in terms of the installed capacity, this has been done, and it is now available. The machine has been commissioned as well. Coming to the A800 frame, I think we still need maybe 1 month or so to really get the product launched. But I think there is quite a bit of demand for a smaller centrifugal. This will be the most efficient offering for an 800 CFM compressor. Yes, sir. Sir, my last question on the export sales, INR 140 crore. Out of this, how much percentage is coming from MENA region? Because it's majorly a significant part is from MENA region for CNG packages. So I'm trying to understand how much percentage comes from in those areas. Sir, secondly, I just want to confirm the non-traditional orders are leveraging vertical integrations like forging machines and assembly. Just want to confirm whether it will be reportable segment from Q1 onwards, Q1 FY 2027 onwards. For that, you have to wait up to Q1. We will definitely disclose as and when we achieve. But definitely, there is a good progress on that part. And definitely it will come under the reportable segment from Q1 onwards. Regarding the export, we are not fully dependent on the MENA region. We are focused on the Southeast Asia, we are focused on the African region. And MENA region, we little bit less because right now the situation is different. Otherwise we focus on different and new niche area for the export. Yeah. The MENA region was definitely a fairly large part of our export sale. However, considering the current geopolitical environment, we have shifted our focus to different regions like Southeast Asia and the North Africa part of MENA. We are still in active discussions for several orders in the Middle East. However, considering the current situation, these are going quite slowly, and I suspect that once the geopolitical situation in the Middle East cools off, we will start to see some rapid movement in this segment. Thank you so much for detailed explanation, sir, on the rest. Thank you. Thank you. The next question is from the line of Samir Thakur from Ambit Capital. Please go ahead. Thanks. Just to carry on with the previous question. This Middle East exposure, can you just get into details of what kind of products you have or whether do you have approvals from, let's say, Aramco or QatarEnergy? Or any certifications which at the end of the war, whether that can help you to a bit start rebuilding their capacities or no. Would that help you? Yeah. Let me put it like this. With regards to the geopolitical situation in the Middle East, there is a near-term pressure, as I mentioned previously, it is difficult to dispatch packages for orders we already have over there. It is also difficult to book new orders. However, long term, this will augur well for us on two fronts. One is on the international side, as you rightly pointed out, there will be a demand for, let's say, gas packages going into some of these countries. There is also a renewed interest in the domestic market in, let's say, alternative fuels like biogas, coal gasification, hydrogen, et cetera. On top of a real push, which is quite visible today in the upstream segment of the domestic market. I hope that answers your question. Yeah. That was helpful. There is one more. Just going to the backlog mix, is it possible to give a separate mix by division? I think there is a lot of backlog from the other division, from precision components. I was just trying to make sense. What is the margin in this precision components? Is that margin-related business? Sorry, I was not able to hear. You are asking for the margin of Systems and Components? No, just the backlog mix by separate divisions if that is possible to give. Yeah. Generally we do not. Okay. Sorry, go ahead. No, my sense is the backlog is driven by maybe the other segment, which is Precision Engineering Division. I just wanted to take a sense whether this Precision Engineering Division, components division, whether it has lower margin than your core business. We generally don't give a breakup of segments. However, as we had pointed out last year, we did have to go to non-traditional segments to get orders. In terms of margins, I would say that from a company standpoint, we will be around directionally 18%-20% as we have guided in the past. All right. That was all from my side. Thank you. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in conference, please limit yourself to 2 questions. Should you have a question to follow up, we request you to rejoin the question queue. The next question is from the line of Amit Anwani from PL Capital. Please go ahead. Hi. Thank you for the opportunity. First question about the oil-free compressor you talked about in your opening remarks. Just wanted to understand, is it a completely new product, and did we got some deals from this, and what is the opportunity? If you could highlight more about this oil-free compressor, which you highlighted. Yeah. The compressor, which we are referring to is branded as Hydrino. It is a water-injected screw compressor, largely used in applications in food processing and pharmaceuticals. In terms of, is there a similar category in the market? Yes, there is. We do have some competition who have similar products. However, we have several unique USPs in this product. One is that we have no oil in this machine at all. Our competitors may have oil in their bearings, et cetera. We are also domestically produced, which means that not only are we generally more cost competitive, but we are also able to offer service and spares to customers much faster than imported machines. Is this a completely new product launch, or this was there and now we are getting- This is a new product for KPCL. Understood. Wanted to understand, we have been talking about Tezcatlipoca, Tyche, and now Zephyros, and I think few other products like Khione over past 24 months. Just wanted to understand now since these products have been kind of there in the market, what kind of sustainable growth you are targeting from these products, obviously category-wise within air refrigeration and all these new launches which are there in the market, which we take, let's say, 2, 3 years of perspective, what is our standing currently in terms of market share or revenue for each of these product, and what kind of growth we can look forward in these products? Yeah. In our segment in terms of capital goods, especially compressors, these are really products which are designed to run and they have to prove themselves before they gain broader market acceptance. It is usually the case where getting the first few orders is hard, and then it gets progressively easier from there. All these products you mentioned, with the exception of Zephyros are now in the market, and we will start to see. We are already growing Tezcatlipoca quite aggressively. Khione as well, we are seeing good growth. Tyche, we did launch last year, so we did grow, but it was from zero. I think generally from new products, we target that we should have at least 10%-15% of sales. As a company, we want to grow at 20%. These products, depending on how old or how recently they were launched, would grow at a slightly higher pace. Right. Lastly, on the Precision Engineering Division, what exactly we are looking as a strategy. I think you explained about INR 500 crore order there, and probably it's a short cycle order. Can we expect FY 2027 also getting order inflows as high as INR 500 crore upward again for the Precision Engineering? Or this is just a one-off case this year? Yeah. The reason why we are being quite opaque on this is because we don't really know whether it is sustainable. I think for that, we'll have to really go forward and see. But certainly, in terms of Precision Engineering, we have many unique capabilities with us, whether that is in forgings, castings, machining, et cetera. There will be a stable demand, but I cannot really foresee whether it will be up to the same extent. Right. Finally, in terms of the current geopolitical situation which you're sensing, anywhere you feel that this would be a key risk in terms of business, whether it is increase in cost or the conversion with your key industries, any sort of challenges? Because we saw FY 2026, we had different kind of challenges in terms of delays in packages. Anything which, in near term, you might feeling that could impact the business because of the geopolitics getting stretched for more than 2 months now. The order book last year beginning it was INR 1,624 crore. Now for the beginning of this year, it is INR 1,863 crore. Despite all this situation, uncertainties, geopolitical, all uncertainties, still we are higher order book compared to the last year. Regarding the price increase, we always focus on that, and wherever it is a short period of the execution, we pass on to our customer, and we don't take into our account. As far as the large package is concerned, we already negotiated, we already finalized the order with our vendors, so there is no directly impacting our profitability. Right. This year, are we also focusing back again on the large packages as a part of inflow? Or now we will be keeping this lesser package orders and more equipment order as a norm for FY 2027, 2028? Yeah. As a strategy, we always want more products versus packages, simply because it makes the business less lumpy and more predictable. That being said, the demand environment for packages does seem to be higher on the back of, let's say, lower orders getting finalized last year. Even though directionally we do want to have more products versus packages this year, as of now, we do have quite a few inquiries out there for packages. Understood. Thank you. Thank you so much. All the best. Yeah. Thank you. Thank you. The next question is from the line of Bhavya Doshi from CRISIL. Please go ahead. Which segments are contributing more to the stronger order inflow which we have experienced in FY 2026? Is there a strong traction in the CNG stations? Are we again bidding for the mother stations which saw higher competition earlier? In terms of orders for the last financial year, they would broadly be in line with the numbers which I had mentioned in terms of the business contribution. However, this year we did have good numbers coming from the Precision Engineering Division. We generally don't like to give a breakup, but it would largely be ACR, then Precision Engineering, then gas, et cetera. On the CNG, we are actively bidding, and there is a renewed interest, as I was stating earlier, to increase the amount of CNG stations. There is a push from various customers to close more orders, and we have been actually closing more orders in the CNG space in the last quarter and even carrying on into this year. Got it. As we had mentioned, we are targeting around 10%-15% of the sales of the company going ahead from the newly launched products. Given the strong IP filing which we have done in the last few years, how does the launch pipeline look like for the new products? How is the pathway ahead? Yeah. We have a number of products which we are actively developing. That being said, a lot of them vary in terms of levels of complexity. So the more complex it is, it generally takes longer with more testing, et cetera. We also have a couple of products where we are expanding the range. This is something which will definitely come faster. It is very difficult for me to commit at this stage what products we will launch this year. I think I already did mention the A800, which is an extension of our centrifugal range. But we do have quite a few products in the pipeline, which you will start to see some launches in Q1 itself. Got it. One last thing is, how much cost savings does a Zephyros package offer as compared to the conventional systems for the end users? Just the broader perspective on it. Yeah. So the Zephyros package is actually significantly more efficient than a traditional water chilling system. It would be in the range of, let us say, 10%-15% plus. Got it. Thank you so much. Thank you. The next question is from the line of Mihir Manohar from Trust Mutual Fund. Please go ahead. Hi. Thanks for giving the opportunity, and congratulations to the entire Kirloskar Pneumatic team for the set of numbers. My question was on the PNG and CGD side. CGD is the focus because of the disruption it has with gas. If you could throw some light as to when does the demand for mother compressors actually kick in? I mean, is the laying of large transmission pipelines and for gas transmission pipelines necessary for the demand of mother compressors to actually kick in? Or is it going to be booster compressor only? Some clarity over here would be helpful. Mihir, we could not hear properly. Will you try again? There is some disturbance from your side. Will you try again? Yeah, sure. Is it audible now? Yeah, it's okay now. Yeah, sure. First of all, congratulations on a great set of numbers to the entire team. Quite good set of numbers on revenue and backlog, both. Mainly wanted to understand on the CGD and PNG side. I mean, Government of India has put a renewed focus over here because of the disruption which has happened. Now, I wanted to understand, when does the demand for mother compressors actually kick in? Is laying of large transmission pipelines, gas transmission pipelines necessary for the demand of mother compressors actually to kick in? I mean, is the demand going ahead for the next, let's say, 1-2 years now? Government of India has put a focus again. Will it be mother compressors or it will be booster compressors? Okay. Let me try and answer your question. You do need pipelines for mother stations, and generally, the trend that we see is that 70% of new stations, at least 70%, are generally daughter stations because these are lower in CapEx. But the disadvantage with the daughter station is that they are higher in OpEx because you need a mother station to first compress the gas, turn it into a cascade, and take it to a place which has a daughter station. There is also a trend of, over time, daughter stations being converted into mother stations. There is a certain market where it's very difficult to put pipelines, like in a hilly area, et cetera. So there, that would be a daughter station. I hope that answers your question. Yeah. But I mean with now a full infrastructure rollout going to happen, at least on the framework and on the policy schemes, it will result into higher demand for mother compressors or for booster compressors? Yeah, it will be a higher demand for both, but it would, in the short term, be skewed more towards daughter stations. But long term, a lot of them will start getting converted into mother stations. Okay, understood. Sure. Second question was on the good order inflow. I mean, quite good numbers, INR 650 crores broadly over the last two quarters. If you can throw some light as to what the value is contributed by the new products, I mean, Tezcatlipoca, Tyche, this new range of compressors that we have introduced. Some color over there and what number are these new products contributing over the last two quarters? Yeah. So generally, we don't really give such granular information. A lot of these products which you mentioned are newer products, and as I had mentioned earlier, it's usually very difficult to get the first few sales, especially in, let's say, products like Tyche, Hydrino, which were just freshly launched. Tezcatlipoca is certainly higher up in terms of the order value, and it also continues to grow quite quickly. Yeah, that's I think the most granular that I can go. Just lastly, a question on the Precision Engineering Division side. Sorry to interrupt, Mr. Manohar. Mihir Manohar, please rejoin the question queue for more questions. Thank you. Okay, thanks. The next question is from the line of Bharat Shah from BCS Capital Ideas Limited. Please go ahead. Yeah, hi. Aman, I think this is beginning of new innings with a bang. I think one couldn't have asked for a better start to the whole altogether new innings that you are about to play. I've known Srini for more than 25 years, and I have seen him to be a very meticulous and very careful planner of the things. So I definitely believe he would have set up this organization on a beautiful firmament for you to play the innings at a much higher crescendo. Or at least, that is what my hope is. So first and foremost, best wishes and congratulations on this lovely note on which the picture has started. Thank you. Yeah. On the growth aspect, you talked about 20% plus on a sustainable basis. So you meant for the current year or for more like five years and more? Because all along over the last few years, I have understood that this growth rate for the company could be upwards of 20%, given the engineering strength we have, given the way the overall manufacturing ecosystem is rapidly evolving, and given the fact that in many ways, what Kirloskar Pneumatic does is touching so many other industries and their needs, and the innovation rate of the new products. Are we being kind of more modest and conservative, or you think this is the most realistic which we should assume? Yeah. When I said 20% in the opening comment, it has always been our aspiration to grow the company at 20% plus over a long period of time. That is on top line and bottom line. Okay. Coming to that part, now that we have reached a meaningful scale and size today, and the overall manufacturing ecosystem evolution is being rapidly proliferating, plus our own innovation rate of the new products, should we be more ambitious than this? Or in your opinion, I think this is a very realistic and practical and strong number that we are talking about. Yeah. In terms of innovation, as I mentioned, we have been recognized as a top 30 IP-driven organization. That being said, this is not all we want to be. We have our own internal targets to grow the amount of IP filings. Some of the products which we are developing today would be cutting-edge, not just in India, but in the world. I think I am really excited when I look at some of the products under development. I do hope we will be able to launch a few of these really cutting-edge ones this year. Just one last. Bharat bhai, I will add something relating to this, coming to innovation. We are giving the presentation to HCA for the Z+, where we availed the PLI scheme approval. One of the managers there asked us, "Who is your technology partner for the Z+?" We said there is no technology partner. Our team is capable to do the innovation, do the engineering, and we have developed this product our own. It was so surprise from them that Indian company is doing such type of innovation. The PLI scheme which is approved so easily that one Indian company doing so much of innovation and coming with the different products, and they appreciated our efforts. No, absolutely delighted to hear that. Absolutely delighted. Just one last small thing, if I can raise that. While clearly the margins in the latest quarter, the fourth quarter of the year gone by at about 26% plus are dramatically high and those cannot be sustainable. But year in entirety at about 21 and a half odd percent that we have delivered for the entire year of FY 2025, FY 2026. Is not this now on a decent top-line base with operating leverage and specialty product offerings and the overall growth opportunity? I am aware that Aman mentioned 18%-20% is more sustainable margin, but I thought year in entirety, 21 and a half percent margin, is that not likely to be prevalent for a while, or you think 18%-20% only should be a fair guidance? Yeah. Just to clarify, what I meant is, in a bad quarter, we always say don't judge us quarter to quarter. In the same vein, in a good quarter, please don't judge us quarter to quarter. And directionally, we will be 18%-20%, and if we can, we will be 21%. Got it. Thank you so much. And Aman, all the very best. Thank you, sir. And thank you, Ramesh bhai. Thank you, Bharat bhai. Thank you. The next question is from the line of Sourabh Arya from Oaklane Capital. Please go ahead. Yeah. Hi, sir. Am I audible? Yes, yes. Go ahead. Yeah. Congrats on this set of numbers. If we see last few calls, Mr. Srini has also mentioned that exports would not be really a big driver for us. Does things change with the disruption in Middle East? If you could double click on your Middle East export opportunity and export opportunity in general. First is that, and then maybe I have a related question after your comments. Yeah. I think export as part of total sale is about 6%. Since one of our major markets, especially for large packages, it is oil and gas, the Middle East is certainly a key market for us. That being said, because it is not a very large part of our total business, it is not that big of a risk for us with the current geopolitical situation. As I said earlier, I think in the long term, the implications of the geopolitical unrest in the Middle East is probably quite good for Kirloskar Pneumatic Company Limited. Okay. Maybe related is, when it comes to these approvals, et cetera, for these packages, because you already are using compressor of Ariel or maybe how they. They are, of course, already approved there. I want to understand, have we won any packages in past in Middle East? If not, why we did not win in past? What gives us general confidence that now we have a significant opportunity there. Yeah, we have won packages in the past and we have a couple of active inquiries also going on. What I will say is that, what is more active in the Middle East is more on the gas side. There on the gas side, there is a number of approved vendors. A lot of them are from lower cost countries. It makes it a little bit difficult for us to compete when everything is specified. You have to get the compressor from a certain vendor, you have to get the engine from a certain vendor, the heat exchangers from a couple of vendors. With everything specified, it becomes pretty difficult to innovate on the cost side and the gas packages. That being said, we are competitive enough to be able to win, and we have won packages from the Middle East in the past. Okay. This is very helpful. Second, just again, a clarification bit on other side. I know you do not want to talk much about it, but still, the first number, Rameshkumar mentioned about INR 500 crore order book for next year. So I want to understand from an execution cycle perspective, what is going into next year. Rameshkumar did mention that in past also that has been the case, but still, if one were to see execution cycle of this other segment, is it more than your base business and majority of this INR 500 crore, which is going into next year, belongs to others? No, I think there is some misunderstanding. As I mentioned, the total order board, if you go into details, is actually more skewed towards products this year. Products generally have a shorter execution cycle. We did get a couple of large package orders which will spill over into the next financial year. But the execution cycle this year for the company should actually reduce. Okay. And maybe if I can please last. Last year also, let us say, our order book was INR 1,600 crore something, book-to-bill of around 1. And we were pretty confident that revenue growth would be 20%. Now again, at the start of this year, book-to-bill is around 1. And we are pretty confident that we can still do 20% top-line growth. So what happened last year that it did not come? And what gives us confidence that with the similar book-to-bill, we will actually be again delivering 20%? That would be nice. Thank you very much, sir. Yeah. So I think the past few years we have had quite a significant reliance on our gas business. As we have been calling out, this is a place where we have been having some difficulties in terms of growth. We will be taking some actions this year to increase our competitiveness in the segment. And I think all the other businesses are doing fairly well. Equipment in particular is growing. And this year, with the Precision Engineering Division really doing a lot of heavy lifting, we believe that we will be back on track to deliver higher than order board sales and reach this 20% plus number, which we are committing for. Perfect. Thank you very much. All the best. Thank you, sir. A reminder to all participants, please restrict yourself to one question. Thank you. The next question is from the line of Divyam Jain from 361 Capital. Please go ahead. Yeah. Hi, am I audible? Yes, please. So my question was regarding the gross margin expansion that we have seen, sir, how much of it would be owing to the backward integration efforts and how much of it? And if it is attributable to the deferment of orders? I believe it has been some Tezcatlipoca orders, I think. How would you attribute the expansion? No, we are not able to understand what exactly you are asking. We saw a significant expansion in the gross margin, I believe, in this quarter. How much of it is attributable to the backward integration efforts, and how much of it is because of the visible deferments that we have seen that you reported in the last quarter? No, the backward integration, what we did in Nashik is coming to Hadapsar for the air compressor division as well as for the transmission division, that is PED now. Roughly, the total output from the Nashik is directly coming as input for our Hadapsar factory, as well as some portions going to Saswad also. It is exactly, we have not calculated how much is going for the compressor division and how much is for the PED. We need some time to calculate and come back to you for the answer. Got you, sir. And sir, what will be our sustainable gross margins going ahead? Yeah. As we have been saying, directionally, we want to be 18%-20% on an EBITDA level. Last year, we also achieved the highest margin in the core business. That time we also said that 18%-20% is sustainable. This quarter also, we crossed almost 23%, and still we are saying 18%-20% is sustainable for core business, that is the compression business. Okay. Thank you. Thank you. The next question is from the line of Sahil Sanghvi from Monarch Network Capital. Please go ahead. Yeah, hi. Good evening. Am I audible? Yes, yes. Please go ahead. Yeah. Congratulations for a very good set of numbers, and congratulations to Mr. Aman Kirloskar for the new designation. My question is more to understand, while Aman has already commented on this, but this new ruling that we have got regarding the Government's press on the March 2026 order for fast-pacing more PNG and CGD lines. I just wanted to understand what kind of traction are you seeing on ground with this ruling because it says that they want to accelerate pipeline infrastructure development, including faster rollouts of CGD and last-mile connectivity for PNG. So what are you seeing on ground, and when can you expect some bit of demand transferring to our order book leading to an improved performance for the gas process gas division? Yeah. As I mentioned, I think we entered this year with an elevated inquiry level in terms of the domestic gas business. And we've also been closing some orders in this segment fairly quickly. So I think on ground, there does seem to be quite a bit of things happening. And I'd also like to once again mention that there is a lot of interest in alternative fuels, especially biogas where we are seeing a lot of interest at the moment. It has not translated into orders for us yet. You must have also seen the press release by the ONGC. Roughly they are targeting to invest something INR 200 billion in oil and gas. And that too investment will come within 5-6 years. And this INR 200 billion investment, when they will start investing, some portion of this will come to us as support for the compressor to their various projects. So we are definitely going to get that because the INR 200 billion investment by oil and gas sector by Government of India is a huge investment, and we are also focusing on that to get that business and to grow our company. Got it. Got it. My last question would be, I understand that we will have a shorter execution cycle for the orders that we have now in our order book. Can you define that period? Would it be 6, 7 months, or would it be much lower? In terms of equipment period is between 4 weeks to something 12 weeks, and roughly the large packages ranging from 6, 7 months, 8 months. Yeah. As we are growing, we are being developed in many products like Tezcatlipoca, Khione, Tyche. They are having very short execution cycle, not very great 8 months, 12 months period there. It is not the case we are not focusing on the large package business. Whatever business we want, we want a top-line growth as well as the bottom-line growth, both. Thank you. Due to time constraint, we take that as the last question. I now hand the conference over to Mr. Dhirendra Tiwari for closing comments. Thank you. Let me take this opportunity to thank the management of Kirloskar Pneumatic for giving us the opportunity to host. Before I close, may I invite Aman to give final comments, then we can close the call. Yeah. Thank you all for joining the call today. As Bharat bhai had mentioned, it is a new innings for me, and I have been blessed to have a great boss and mentor of Mr. Srinivasan for the past five years. I think we learned a lot. He really taught us how to push boundaries, innovate, and really be hungry for growth. So we have big shoes to fill, and we will do our best to hit our targets of 20% plus growth. Thank you so much. Thank you. Now we can close the call, please. Thank you, sir. Thank you. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.