KSB Ltd - Mar 2025 Earnings Call Transcript Analysis

March 5, 2025 · 3 min read

Earnings Call Transcript Analysis Report #

Key Financial Metrics: Revenue for Q4 CY'24 was ₹726 crores, and the year ended with ₹2,533 crores. PBT for the quarter was ₹938 million and ₹3,220 million for the year. EPS was ₹13.84. ROCE with cash and bank balance was 23.42%. Dividend declared was 200%.
Comparison with Previous Periods: Revenue from operations showed a CAGR of 20%. Profit after tax showed a CAGR of 25%. EBITDA showed a CAGR of 18%.
Growth/Decline Areas: Inventories improved, with DIH reduced from 96 to 83. Receivables were maintained at 74 days. Net cash position improved to ₹323 crores.

Strategic Announcements: KSB Limited is focusing on the domestic market with increased branding and advertising. They are also focusing on SupremeServ (Spare Part business and service) and the valves business.
New Products/Services/Markets: New products include a DC motor for solar applications and additions to the valves portfolio, such as compact ball valves and low emission valves.
Operational Changes: Capacity enhancement measures through contract manufacturing for low-end valve products, efficiency improvement through semi-automation, and inventory control through standardization in the valves division.
Ongoing/Completed Projects: Successful development of DC motor, MNRE approvals for solar products, and qualification for MNRE tender under the PM-Kusum scheme. 7,000+ solar system orders received, and 5,000+ systems installed.

Industry Trends: Positive outlook for the nuclear energy sector, with increased government focus. Growing demand in the solar market.
Competitive Positioning: KSB Limited reached the first position in GGC domestic valves in 2022.
Market Challenges/Opportunities: Opportunities in the solar market under the PM-Kusum scheme. Opportunities in thermal power projects, valve and pump market
Market Share: KSB Is not one of the leader in the domestic market.

Concerns/Challenges: Payment delays in the government solar business. Long working capital cycles in the solar business.
Operational Constraints: Recruitment and hiring of skilled personnel are challenging.
Market Uncertainties: The pace of execution in solar projects has reduced due to payment delays.

Outlook/Projections: Targeting four nuclear pumps next year. The expectation of better CapEx and project movement in the petrochemical and refinery sector this year.
Expect growth in standard business and aftermarket (SupremeServ).
Planned Investments: Investing in plants in Shirwal and Sinnar, upgrading machinery, and building a new shed in Sinnar.
Expect continous growth in Valve Business
Strategic Priorities: Focus on the standard business, SupremeServ, valves, nuclear, and solar segments.

Pressing Analyst Questions: Status of nuclear power execution, capacity utilization, opportunities in the thermal sector, growth and margins in the valves business, and strategy for the residential pumps segment.
Management Responses: Expects to supply two pump sets this year and four next year in the nuclear segment. Capacity utilization is between 85% and 90%. New opportunities are opening up in the thermal sector with L&T winning projects.
Expect margin between 13 to 15 in Valve Segment.
New Information: KSB is focusing on the residential segment with TV ads and a focus on distributors. The supply chain is considered stable, with low import dependency.

Overall Tone: Confident and optimistic.
Areas of Confidence: Growth in the standard business, SupremeServ, valves, and solar segments. Strong financial standing and ability to manage long working capital cycles.
Areas of Concern: Challenges in recruitment and hiring, and the pace of execution in solar projects.

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