Dear Shareholders,
On behalf of the Board of Directors, it gives me great pleasure to present the 79th Annual Report of Kirloskar Electric Company Limited (KECL) for the financial year ended March 31, 2026.
The past year has been one of meaningful progress and deliberate positioning for your Company. While we continue to operate in a challenging business environment, FY 2025-26 has demonstrated disciplined execution, operational focus, and strategic clarity, all of which are beginning to translate into measurable outcomes.
During the year, our revenue increased by 8.4% to ₹58,934 lakhs, while profit before tax grew by 18.1% to ₹876 lakhs. The fact that profitability has grown faster than revenue reflects the benefits of improved operational efficiencies, better execution, and a stronger focus on value creation. Although these results represent only one step in a longer journey, they provide encouraging evidence that our strategic initiatives are moving in the right direction.
The Indian electrical equipment industry continues to offer significant opportunities. Government initiatives such as ‘Make in India’ and ‘Atmanirbhar Bharat’ combined with sustained investments in manufacturing, infrastructure, power generation, transmission and distribution, renewable energy and industrial modernization continue to strengthen demand across our core businesses. India's accelerating industrialization coupled with long-term infrastructure development provides a favourable environment for companies with strong engineering capabilities and established manufacturing expertise. Within this evolving landscape, we remain focused on the segments where our technological strengths, manufacturing capabilities, and long-standing customer relationships enable us to compete effectively.
FY 2025-26 was marked by important developments across three key dimensions.
First, our revenue growth was driven by both higher business volumes and stronger market positioning. More importantly, Profit Before Tax increased by 18.1%, outpacing our revenue growth of 8.4%, reflecting the positive impact of our continued focus on operational efficiency and disciplined execution.
Second, we strengthened our leadership team to support the Company's long-term growth. As a significant leadership transition, my daughter Ms. Janaki Kirloskar was promoted as Joint Managing Director (Additional Director) effective from May 26, 2026, subject to the approval of our shareholders. Since assuming the role of Chief Executive Officer (CEO) in February 2026, Janaki has brought deep operational expertise and strategic perspective, drawing upon twenty years of experience across manufacturing, business transformation and entrepreneurial ventures. She will work closely with our Managing Director, Mr. Anand B. Hunnur, to further strengthen operational execution and accelerate market development across our businesses. We also appointed Mr. Dillip Kumar Pani as our Chief Financial Officer (CFO) and Key Managerial Personnel. With over nineteen years of experience in finance, statutory compliance, treasury management, and fundraising across multiple industries, Dillip adds significant financial leadership to our executive team as we continue to strengthen our financial position.
Third, our operating segments showed encouraging signs of improving business fundamentals. The Power Generation & Distribution business delivered a Profit before interest and tax (PBIT) of ₹4,839 lakhs, nearly doubling its performance over the previous year. Our Rotating Machines business, which has historically presented the greatest operational challenges, continued its recovery with a PBIT of ₹1,328 lakhs, reflecting improving stability. The Other Products segment contributed ₹1,615 lakhs, reinforcing the value of maintaining a diversified product portfolio.
While these achievements are encouraging, it is equally important to acknowledge the realities we continue to address. Our Company carries the accumulated impact of several difficult years. Our net worth remains under pressure, and we continue to operate with a high degree of financial discipline and operational focus. This is not a new challenge, nor do we view it as a crisis narrative. Rather, it represents the context within which we are executing a carefully considered recovery strategy. Our priorities remain clear: monetising non-core assets, improving operational efficiency, strengthening cash flows, and progressively rebuilding our capital base.
Our auditors have noted that the financial statements have been prepared on a going concern basis, contingent upon the successful implementation of our restructuring initiatives and the infusion of committed capital. We fully recognize this responsibility. The progress achieved during FY 2025-26 through improved profitability, better working capital management, and disciplined capital allocation demonstrates our commitment to executing this plan responsibly and consistently.
Looking ahead, we remain optimistic about the opportunities before us. India's energy transition, rapid infrastructure expansion, and increasing investments in renewable energy continue to create sustained demand for electrical equipment, transformers, motors, and power solutions. Government initiatives such as the National Infrastructure Pipeline, PM Gati Shakti, and the continued emphasis on domestic manufacturing provide a strong foundation for long-term industry growth. We believe your company, Kirloskar Electric, is well positioned to participate meaningfully in this evolving landscape.
At the same time, we recognize that sustainable recovery demands consistent execution. Across our five manufacturing plants, fourteen branch offices, and international operations, our dedicated professionals continue to demonstrate remarkable commitment, technical expertise, and resilience. Their dedication has been instrumental in the progress we have achieved, and I extend my sincere appreciation to every member of the Kirloskar Electric family. I also recognize that many have navigated an extended period of uncertainty with unwavering professionalism. Your perseverance has been fundamental to our continued progress.
During the year, we successfully supplied transformers and electrical equipment to several major infrastructure projects, strengthened long-standing relationships with customers in the power generation and distribution sectors, and continued to improve operational performance across our manufacturing facilities. These achievements reinforce our confidence in the strength of our products, our engineering capabilities, and our customer partnerships.
As we move forward, our priorities remain firmly anchored on sustainable value creation. We will continue to strengthen our leadership position in the Power Generation & Distribution business while further improving the profitability of our Rotating Machines segment. We remain committed to completing our capital reallocation initiatives to improve our financial strength, achieving sustainable profitability driven by operational excellence, and expanding our customer relationships and market presence both within India and internationally.
We fully recognize that our recovery is a multi-year endeavour. While some of our actions may address immediate challenges, they are each purposefully aligned with our long-term recovery goals, and we remain committed to delivering steady, measurable progress by strengthening the fundamentals that underpin a resilient and sustainable enterprise.
Over the past eight years, Kirloskar Electric has navigated one of the most challenging periods in its long and distinguished history. Those experiences have tested our resilience, sharpened our focus, and provided valuable lessons. Today, we move forward with greater clarity, stronger leadership, and renewed purpose. As we stand on the threshold of our 80th year of operations, we remain collectively committed to strengthening our financial foundation, advancing operational excellence, embracing technological innovation, and positioning ourselves strategically for sustained and profitable growth.
On behalf of the Board, I extend my sincere gratitude to my fellow Directors, our management team, employees, and workers, our bankers and financial partners, our customers, suppliers, business associates, and our shareholders for your continued trust, confidence, and support. Your partnership has been invaluable throughout this period of transformation, and we look forward to creating enduring value together in the years ahead.
Thank you for your continued trust and partnership.
