testKirloskar Brothers bets on data centres, thermal power to drive growth

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Kirloskar Brothers Limited (KBL) expects data centres, thermal power, and overseas oil and gas projects to remain key growth drivers going ahead, as the pump manufacturer targets double-digit revenue growth and continues to expand its international business.

"The order book is the leading indicator, while sales are the lagging indicator. To deliver double-digit sales growth, we also need double-digit growth in order inflows. We remain optimistic because our pipeline is healthy," Alok Kirloskar, managing director of Kirloskar Brothers International B.V. and SPP Pumps Ltd., told Business Standard.

KBL is the flagship​ company of the USD 2.5 billion Kirloskar Group. KBL is a​ multinational fluid management solutions provider and manufacturer of industrial, agricultural, and​​ domestic pumps, valves, and hydro-turbines.

In the first quarter of fiscal year 2027 (Q1 FY27), KBL reported revenue (from operations) of Rs 1,104.9 crore, up 12.9 per cent year-on-year (YoY). In FY26, the company's revenue was Rs 4,538 crore.

As of June 2026, KBL's domestic industrial order book stood at over Rs 2,300 crore, while the international industrial order book was around Rs 1,500 crore.

Kirloskar said both retail and industrial businesses supported growth during the first quarter. Demand in the retail segment improved on the back of higher investments by households and farmers, while the industrial business benefited from government spending on water infrastructure in India and robust overseas demand.

International business grew around 20 per cent during the quarter, led by data centres and offshore oil and gas projects. Overseas revenue contributed around 38 per cent of consolidated revenue in Q1, with the company reiterating its long-term ambition of moving towards a 50:50 India-international revenue mix.

Data centres have emerged as a significant growth engine for KBL's overseas operations, particularly in the United States.

"Four years ago, they contributed nothing to our US business. Last year, they accounted for 25 per cent of our US business," Kirloskar said.

The company supplies cooling infrastructure for hyperscale data centres, including modular pumping systems, booster systems, HVAC pumping modules, containerised firefighting systems, along with associated piping and control systems.

Beyond data centres, the company expects thermal power to remain a major domestic growth driver, supported by fresh capacity additions.

"Nuclear power also represents a significant opportunity over the medium to long term. However, several issues??"including government policy, funding mechanisms and tariff structures??"need to be resolved before investments accelerate," he said.

The company also sees opportunities across steel, distilleries, real estate, airports, metro rail and other infrastructure projects in India.

Internationally, KBL expects growth to be driven by oil and gas, data centres and its expanding services business. The company currently manages around 160 customer sites under long-term service contracts covering pumps of multiple brands.

Kirloskar said the company is focusing on expanding its presence across the US, where business is currently concentrated in a limited number of states despite the country being its second-largest unified market after India.

"Our strategy is to strengthen facilities already located within key trade zones rather than build entirely new plants. The Indian government investment in infrastructure continues to support manufacturing. We're also seeing increased private sector investment after several years of relative stagnation," Kirloskar added.

India will also continue to strengthen its role as the company's global manufacturing base. While overseas facilities in markets such as the UK, US, South Africa and Thailand undertake local manufacturing and assembly to meet regulatory requirements, base components are increasingly sourced from India, helping the company avoid tariff disadvantages while maintaining local manufacturing capability.

"Facilities outside India primarily ensure compliance with local regulations and add value so products qualify as locally manufactured. Base components continue to come from India. This model allows us to achieve international pre-tax returns on sales of 8.5 per cent to 11.5 per cent, which is significantly higher than most global pump companies," Kirloskar said.

The company is expanding its existing manufacturing facilities. Capital expenditure for FY27 is expected to remain broadly in line with last year at around Rs 100 crore.

Kirloskar said geopolitical tensions in West Asia have impacted sales and disrupted logistics, particularly for shipments to Saudi Arabia and Qatar, but investment activity in the region remains resilient, offering business opportunities despite supply chain challenges.

The company estimates logistics, commodity inflation and supply disruptions to have increased costs by as much as 15-18 per cent in certain cases. While KBL is able to pass on around 80-85 per cent of higher costs in industrial projects, the pass-through is lower at 50-60 per cent in the retail business.

Looking ahead, Kirloskar identified services and AI as two key strategic priorities. The company has developed an AI platform called "Colligo", which helps identify pumps, diagnose faults and estimate repair costs, with the aim of scaling the platform across its global service network. Revenue from the platform is expected to come from spare parts, services and software subscriptions.

KBL also remains open to acquisitions in India and overseas, with a particular focus on service businesses that strengthen customer relationships and recurring revenue streams.