Engineering Stock Gets Buy Rating With 55% Upside From ICICI Direct; Do You Hold It?

Synopsis: Kilburn Engineering is in focus as it has Rs. 495 cr order backlog, FY26 revenue projected at Rs. 625–650 cr, 25% CAGR through FY28, sustained 22–23% EBITDA margins, and ongoing capacity expansion and ICICI targets a 55% upside.

The shares of the company engaged in designing and manufacturing drying and heat-processing systems like rotary dryers, kilns, coolers, heat exchangers, and solvent/vapor recovery units, mainly for the chemical and petrochemical sectors, are in the spotlight after ICICI Securities initiated a ‘Buy’ of Rs. 770, on its shares which is an upside of 55 percent.

With a market capitalisation of Rs. 2,604 cr, the shares of Kilburn Engineering Ltd were trading at Rs. 497 per share, down from its previous close of Rs. 505.40 per share. 

ICICI Direct on Kilburn Engineering Ltd 

ICICI Securities maintains a Buy rating on Kilburn Engineering with a target price of Rs. 770, indicating a potential upside of 55% from current levels. The company serves a diversified set of industries including chemicals, petrochemicals, metals, nuclear, fertilizers, and recycling, with around 30% of revenue coming from exports.

ICICI Securities highlights a strong revenue visibility for Kilburn, with an order backlog of Rs. 495 cr as of December 2025 and post-quarter wins of around Rs. 70 cr. The company also has an inquiry pipeline of roughly Rs. 4,000 cr across its end-markets. Management expects the FY27E order book to start at over Rs. 500 cr, providing clear revenue visibility for the next 12–18 months.

For growth, Kilburn has guided FY26E revenue at Rs. 625–650 cr, reflecting nearly 50% year-on-year growth. It projects a 25% CAGR over FY27–28E, aiming for revenue in the Rs. 800–1,000 cr range. The company has consistently maintained EBITDA margins of 22–23%, and management expects to sustain over 20% margins due to disciplined procurement practices and high-value solutions. Approximately 80% of raw material inputs are locked in at the LOI stage, helping protect margins against cost fluctuations.

Kilburn is also investing in capacity expansion, with ongoing projects at Saravali and ME Energy (Pune), along with a planned capex of Rs. 40–45 cr over the next 12 months. These expansions are expected to improve operating leverage and support scaling towards higher revenues.

The brokerage expects revenue and PAT to grow at a CAGR of 29.8% and 32.8%, respectively, over FY25–FY28E and maintains a ‘Buy’ rating on KEL, with a target price of Rs. 770, based on 25x P/E on FY28E earnings per share (EPS).

Kilburn Engineering Limited is a leading designer, manufacturer, supplier, and installer of customised process equipment for industrial applications both domestically and internationally. The company specialises in industrial drying systems including rotary, flash, spray, band, tea, paddy, sugar, coconut, paddle, sludge, vacuum, and fluid bed dryers along with coolers, calciners, and packaged systems. 

It delivered a robust performance in Q3 FY26, with consolidated revenue increasing 45% year-on-year to Rs. 156.8 crore. EBITDA rose 54% YoY to Rs. 36.1 crore, with the EBITDA margin improving by 134 basis points to 23%. Consequently, PAT for the quarter reached Rs. 23.2 crore, up 53% YoY, and the PAT margin expanded by 76 basis points to 14.8%.

It has strengthened its capabilities through two wholly owned subsidiary acquisitions. It acquired M.E. Energy Private Limited in February 2024 for Rs. 98.7 cr, expanding into Waste Heat Recovery (WHR) systems, and Monga Strayfield Private Limited in January 2025 for Rs. 123 cr, adding Radio Frequency (RF) drying systems to its portfolio.

Its clientele spans leading players across multiple industries, reflecting a strong and diversified customer base. It serves marquee names in automotive, food & beverages, oil & gas, carbon, iron & steel, and industrial segments, including companies such as Mahindra, Britannia, ONGC, JSW, Tata Motors, IndianOil, PCBL, Black & Veatch, and Wartsila, underscoring its strong industry partnerships and broad sectoral reach.

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