This Small-cap Engineering Stock Hits 52-week High: The Company Anticipates 50% Revenue Growth for FY26, Strong Pipeline and Rs 1,000 Crore Target by FY28

Kilburn Engineering Limited announced its Q1FY26 results on August 8, 2025, marking the first full quarter of consolidation of Monga Strayfield, acquired in January 2025. On a standalone basis, the company reported revenue of Rs 94.67 crore with an EBITDA margin of 25.49 per cent, reflecting year-on-year growth of 48 per cent in topline and 47 per cent in EBITDA. On a consolidated level, revenue stood at Rs 129.25 crore with an EBITDA margin of 25.77 per cent. The quarter ended with an order backlog of Rs 447 crore, and since July 1, additional orders and LOIs worth Rs 98 crore have been secured. The enquiry pipeline exceeds Rs 4,000 crore at the group level, and management expects a 20–25 per cent conversion rate.

The company reiterated its guidance for FY26 with ~50 per cent consolidated revenue growth to reach Rs 650–700 crore, followed by a CAGR of 25–30 per cent from FY27 onwards on the FY26 base. Rolling enquiries are more than Rs 40,000 million on a consolidated basis, at various stages of bidding and evaluation. The long-term topline target remains Rs 1,000 crore by FY28.

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Margins remained strong at 25–26 per cent in Q1 due to favorable product mix, operational leverage, and subsidiary contributions. Management has revised sustainable EBITDA margin guidance to 22–23 per cent from 20–22 per cent, supported by high-margin orders such as the Morocco project for OCP Group, which is also expected to generate repeat business. Sectoral diversification is expanding into nuclear energy, fertiliser, carbon black, oil and gas, and waste heat recovery. Nuclear orders are being booked through L&T for NPCIL, fertilizer orders include Coromandel, and replacement demand now contributes 30–35 per cent of intake, offering a stable revenue base.

Subsidiaries continue to progress, with M.E. Energy working on compressed biogas, waste-to-energy, and cement projects, besides pursuing export opportunities in Nigeria. Its current ticket size remains below Rs 2 crore, with focus on scaling up to Rs 40–50 crore packages. Monga Strayfield is in early integration stages, with strong export exposure to the US and synergies in radiofrequency drying solutions for agro products. The company is expanding its Saravali unit with a Rs 30 crore brownfield CapEx to be completed by March 2026, expected to add Rs 100–150 crore in output. A Phase 2 expansion at M.E. Energy is also being considered.

The consolidated order pipeline includes projects ranging from Rs 50–60 crore to large-scale bids of Rs 150–200 crore. Exports now form 25–30 per cent of order intake, with focus on Africa, Europe, Asia Pacific, and Korea, while US exposure remains limited. New offerings such as titanium products, air preheaters, and technology partnerships with Nara (Japan) and IDRECO (Europe) continue to enhance the portfolio. Key risks include manpower shortages and potential project delays, though management remains confident given the healthy pipeline.

The company is preparing for an NSE listing, expected in 6–8 months, while promoters have no pledged shares, only a non-disposal undertaking for 9 per cent of holding. Cash flow remains healthy, supported by dispatches and warrant conversion. Kilburn sees its competitive advantage in four decades of experience, a broad portfolio of drying solutions, and synergies from acquisitions, though it acknowledges being relatively small in the global USD 2 billion dryer market and domestic Rs 5,000 crore waste heat recovery opportunities. Strategic priorities are centered on integration and organic growth, with no new acquisitions planned. Management reiterated confidence in maintaining momentum and achieving its vision of becoming a Rs 1,000 crore company by FY28.

Disclaimer: The article is for informational purposes only and not investment advice.