Transcript of the conference call
KIRLFER · price
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Kirloskar Ferrous Industries reported Q2 FY26 total sales of INR 1,736 crore (up from INR 1,683 crore), with EBITDA rising to INR 214 crore (vs INR 195 crore) and PBT growing 9.4% to INR 126 crore. H1 FY26 EBITDA reached INR 427 crore (vs INR 383 crore) and PBT rose 16.8% to INR 256 crore. Tube sales volumes surged 24% YoY to 49,588 tons and H1 tube volumes grew 33%, though realizations dropped 7%. Pig iron sales were 131,508 tons but realizations fell 11% (INR 41,670 to INR 37,098 per ton) and the MD admitted 'we don't cover our costs' in pig iron. The company outlined a clear strategic shift toward value-added products: merging Oliver foundry into KFIL, pursuing steel-making at Koppal (2 years away), and investing ~INR 200 crore in wind power plus 30 MW solar. Casting margins are steady at 15-16% EBITDA while pig iron EBITDA is under pressure at 6-7% with management targeting a recovery to 10%+.
Near-term: pig iron margin pressure persists and is a drag on overall profitability, but tubes and castings are delivering volume-led growth. Long-term: the shift to steel-making, Oliver integration, seamless tube expansion (toward 3 lakh tons), and renewable energy investments position the company for improved margins and reduced commodity exposure over the next 2-3 years.