Kirloskar Electric Company Limited – Audited Financial Results for FY 2025‑26

Announcement Date: 26 May 2026

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1. Overview

Kirloskar Electric Company Limited (KEC) has released its audited standalone and consolidated financial statements for the quarter and the full financial year ended 31 March 2026. The results incorporate the effect of the amalgamation of its wholly‑owned subsidiaries (Kelbuzz Trading Pvt Ltd, SKG Terra Promenade Pvt Ltd, SLPKG Estate Holdings Pvt Ltd and Luxquisite Parkland Pvt Ltd) approved by the National Company Law Tribunal on 30 April 2026 (effective 1 April 2024).

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2. Financial Highlights

Metric (₹ Lakhs)	FY 2025‑26	FY 2024‑25	YoY Change
Revenue from operations (Standalone)	58,934	54,382	+7.9 %
Total income	60,040	55,080	+9.0 %
Profit before tax	875	741	+18.1 %
Profit after tax	845	716	+18.0 %
Total comprehensive income	1,028	761	+35.1 %
Basic EPS (₹ 10 face value)	1.27	1.08	–
Consolidated equity attributable to shareholders	13,182	12,526	+5.2 %
Debt‑equity ratio (Consolidated)	0.76	0.92	–
Cash & cash equivalents (end‑year)	1,917	1,683	+13.9 %

All figures are presented in lakhs of rupees unless otherwise stated.

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3. Segment Performance

Segment	FY 2025‑26 Revenue (₹ Lakhs)	FY 2024‑25 Revenue (₹ Lakhs)	FY 2025‑26 PBIT (₹ Lakhs)	FY 2024‑25 PBIT (₹ Lakhs)
Power generation / distribution	30,509	24,808	4,839	2,523
Rotating machines	26,812	27,932	1,328	2,358
Others	4,236	4,250	1,615	1,553
Total	61,557	56,990	7,782	6,434

Revenue growth was driven primarily by the Power generation & distribution business, while Rotating machines saw a modest decline.

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4. Balance‑Sheet Strength

• Total assets rose to ₹ 63,363 Lakhs (up 3.7 % YoY).
• Non‑current assets remained stable at ₹ 45,507 Lakhs.
• Current assets increased to ₹ 17,856 Lakhs, supported by higher inventories and trade receivables.
• Borrowings fell to ₹ 10,033 Lakhs from ₹ 11,611 Lakhs, reflecting repayment of term loans under the JLF restructuring mechanism.
• Debt service coverage ratio (DSCR) improved to 1.83 (from 1.10) and interest service coverage ratio (ISCR) also at 1.83, indicating better ability to meet debt obligations.

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5. Cash‑Flow Summary

Cash‑flow category	FY 2025‑26 (₹ Lakhs)	FY 2024‑25 (₹ Lakhs)
Net cash from operating activities	93	4,103
Net cash from investing activities	1,718	(2,068)
Net cash used in financing activities	(4,127)	(2,706)
Net increase in cash & cash equivalents	234	47
Cash & cash equivalents at year‑end	1,917	1,683

Operating cash generation weakened markedly, while investing activities generated a positive cash inflow mainly from proceeds on the sale of property and equipment. Financing activities continued to be a net outflow due to repayment of inter‑company deposits (ICDs) and short‑term borrowings.

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6. Corporate Actions

Merger of Subsidiaries

• The Board approved the merger of four wholly‑owned subsidiaries on 23 May 2024.
• Application filed with NCLT on 31 Oct 2024; the Tribunal approved the scheme on 30 Apr 2026.
• The amalgamation is reflected in the FY 2025‑26 financials, with comparative figures restated accordingly.

Asset Monetisation

• Sale agreement (Oct 2022) to divest 31 acres 24 guntas of land at Gokul Road, Hubballi for ₹ 9,512 Lakhs (pending land‑use change).
• Sale agreement (Mar 2024) for 1.06 acre at the same location for ₹ 300 Lakhs; possession transferred on 26 Dec 2025.

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7. Regulatory & Legal Matters

Issue	Status
Resale‑tax penalty (₹ 527 Lakhs) – Special Leave Petition filed in Supreme Court (originally imposed on former subsidiary Kaytee Switchgear Ltd).	Petition admitted; management believes outcome will be favorable; no provision recorded.
Land‑use change for Gokul Road property – High Court (Karnataka) order dated 25 Feb 2026 directing the Urban Development Department to issue the required order within four weeks.	As of the reporting date, the order has not been issued; company evaluating further legal steps.
New Labour Codes (effective 21 Nov 2025) – resulted in an ₹ 809 Lakhs increase in gratuity and leave liabilities, recorded under “Exceptional items”.	Non‑recurring impact; reflected in audited results.

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8. Going‑Concern Assessment

• The auditors highlighted that net worth (excluding revaluation reserve) is eroded and there are overdue creditor payments.
• Management’s restructuring plan – repayment of restructured loans, monetisation of non‑core assets, and anticipated fund infusion – was deemed sufficient to support the going‑concern basis.
• The audit opinion was unmodified with respect to the going‑concern assumption.

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9. Outlook & Investor Takeaways

• Revenue growth is anchored by the Power generation & distribution segment, while Rotating machines remain a pressure point.
• Improved leverage (debt‑equity ratio down to 0.76) and stronger coverage ratios suggest a more resilient balance sheet.
• Cash‑flow dynamics indicate a need to monitor operating cash generation; however, asset sales are providing liquidity.
• Legal and regulatory risks (tax penalty litigation and land‑use approval) remain unresolved but are not currently expected to materialise as cash outflows.
• The amalgamation has been fully integrated, and the company is positioned to leverage the combined asset base for future growth.

Investors should consider the above factual points, alongside their own risk assessment, when evaluating Kirloskar Electric Company Limited.