Kirloskar Pneumatic Company Ltd (BSE: 505283) Q4 2026 Earnings Call dated Apr. 27, 2026
Corporate Participants:
Aman Kirloskar — Managing Director
Jitendra Shah — Company Secretary & Head Legal
Ramesh Birajdar — Vice President & Chief Financial Officer
Analysts:
Dhirendra Tiwari — Analyst
Priyank Chheda — Analyst
Balasubramanian — Analyst
Sameer Thakur — Analyst
Amit Anwani — Analyst
Bhavya Doshi — Analyst
Mihir Manohar — Analyst
Bharat Shah — Analyst
Sourabh Arya — Analyst
Divyam Jain — Analyst
Sahil Sanghvi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Kiloscore Pneumatic Co. Ltd. Q4FY26 earning conference call hosted by Antique Stock Broking Limited. As a reminder, all participant lines will be in a listen only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during the conference call please signal an operator by pressing star then zero on a touch tone phone. Please note that this conference has been recorded. I now hand the conference over to Mr.
Dhirenda Tiwari from Antique Stock Broking Ltd. Thank you. And over to you sir.
Dhirendra Tiwari — Analyst
Good evening. On behalf of Antique Stockbroking I welcome you all to 4QFI 26 Revised Conference Call. I am pleased to have with us today Mr. Aman Kirloskar, Managing Director and Mr. Ameh, CFO along with the management team. As you are aware, the company continues to deliver long term growth. Congratulations to Mr. Aman and team Kaloskar Pneumatic. All the best for future. Now I invite Mr. Aman Kaloskar to discuss results post which we can take the Q and A over to you Aman. Thank you.
Aman Kirloskar — Managing Director
Thank you. Thank you all for joining our call. Today I have with me Mr. Ramesh Bhirajdar, the Chief Financial Officer of the company and Mr. Jitendra Shah, the Company Secretary. Before proceeding with the business updates I kindly ask Mr. Jitendra Shah, our company secretary to read out the disclaimer statement.
Jitendra Shah — Company Secretary & Head Legal
Thank you sir. And good evening to all. The presentation uploaded on the website of the company and discussion on the financial results during the earnings call may contain statements relating to future business development and economic performance that could constitute forward looking statements. While these forward looking statements represent the company judgments and future expectations a number of factors could cause actual development and results to differ materially from expectations. The company undertakes no obligation to publicly revise any forward looking statement to reflect future events or circumstances.
Further, investors are requested to exercise their own judgments in assessing various risks associated with the company and also the effectiveness of the measures which taken by the company in tackling them as indicated during the discussion. Thank you.
Aman Kirloskar — Managing Director
Thanks Nitendra. Let me start by wishing all of you a very happy and prosperous new financial year. FY27 has begun and it is a good moment to reflect on where we have come from and set the context for where we are going. I would like to highlight a few key points of FY26. During the year we had the highest order booking of more than 2000 crores. We declared the highest total income of 1786 crores and the highest PBT of 356 crores. We developed a couple of new products including the Zephyros air conditioning package, providing a competitive edge in a new business segment.
We also declared the Highest dividend of Rupees 12 per share which is 600% on face value of Rupees. 2. During the last financial year we made meaningful progress on our long term goals. Despite external uncertainties, the domestic market remains strong with significant performance in the food, dairy, chemicals, fertilizers and general engineering sectors. While oil and gas lagged due to slower order finalization, we saw momentum begin to pick up in the last quarter. Additionally, products such as the Tezcatli Poca centrifugal compressor and the Keown Refrigeration compressor continued to gain market share.
Coming to innovation we have made significant progress on development of several cutting edge compression solutions represented by our highest ever IP filings of 57 for the year taking us to over 128 IPs filed. In recognition of this, KPCL has been awarded a top 30 IP driven organization by CII. We launched our oil free air compressor Hydrino and we are quite happy to note that we have even booked a few orders for these for the year. We also launched our Taichi Semi Hermetic compressors which we have also sold.
Our Zephyros air conditioning package will be commercialized in the market in the first quarter of FY27 as we are still doing some fine tuning to compact the design and reduce the cost. However, the units that we have installed in our Hadapsar office at SASWAT factory are running very well. Our enablers remain robust and well aligned with our values and culture. In recognition of our best in class HR practices and policies, we were honored with the HR Excellence Award from the Institute of Directors.
Our PBT last quarter was also significantly elevated. This was made possible by all the enablers we’ve been working hard on for the last few years. Our in house capabilities which allowed us to offset inflation to some extent and resulted in higher margins. We also took a measured approach in markets with lower margins like boosters and screw compressors and and did not get into any price walls here. If you could get an order with the margins we wanted we took it and if not we let it go. Lastly, we focused on less contested spaces based on our own IP and import substitution which also helped push up margins.
While this quarter and year has been good on the margin front, we would like to caution that this year would be a bit of an exception. A margin expectation of 18 to 20% EBITDA would be more sustainable. While we always strive for higher margins, we must also consider the impact on growth and find a balance Now Coming to our Business units the Air Compressor Division the year was good for the tezcatlipoca centrifugal compressors which continue to take market share. Aside from our key sectors of metals and power plants, we have also managed to get some orders from sectors like pharma, tire manufacturing and textiles during the last financial year.
Our range of reciprocating compressors also did well with orders for gas compressors hitting record highs. Screw compressors were a laggard the last year. ACD remains to be roughly 18 to 20% of our business. On the refrigeration side, the business delivered a strong performance during the year, achieving record high volumes for our KC KCX compressor range. Kion sales also continue to pick up and gain more acceptance in the market. We executed several large packages this year, some of which went out in Q4.
The business is roughly 40 to 45% of our total business Coming to Process Gas Systems as we had previously mentioned, our decreased dependence on PGS has de risked our reliance on large oil and gas orders in the Middle East. However, our O and M business is expanding. We currently manage over 1000 CNG stations across India, reflecting an increasing trend in this segment. While current gas shortages have not yet impacted the CNG market and auto booking remains active, we continue to monitor potential future effects.
The Gas System Division performed well this year and the outlook remains positive. We expect the geopolitical situation in the Middle east to drive demand for domestic exploration and upstream gas projects. Furthermore, there’s a renewed interest in alternative fuels and KPCL is well positioned to capitalize on opportunities across various sectors including biogas, hydrogen and coal gasification. Egs contributes roughly 35 to 40% of our business. We have also established a new business unit in the last financial year which is Precision Engineering Division.
We have established this division to leverage our manufacturing capacities and capabilities including forgings, castings and precision machine components as as well at our NASIC and had upsell facilities. Please note that this is a non reportable segment for FY26. Given the renewed interest in specialized manufactured products, we believe our unique capabilities are well positioned to drive growth. While we have secured several orders in this segment and we are currently in the execution phase, we would avoid talking too much about this business until we are clear that this is sustainable and not one time in nature.
Coming to the Outlook despite the challenges of the past year including delayed package orders and late finalization of large contracts, we believe we remain well positioned to deliver strong growth ahead. The current geopolitical climate has increased demand for exploration and upstream packages alongside rising interest in alternative fuels like biogas and hydrogen. We offer established solutions for all of these segments. Furthermore, our core revenue generating sectors including oil and gas, food, dairy, chemicals and power are all expected to grow.
Our localized supply chain and focus on make in India import substitutes insulate us from many geopolitical risks and provide a competitive advantage. We continue to invest in unique in house manufacturing capabilities that will further strengthen our market position. With our strong order board and a substantial volume of active proposals entering the new financial year, we we are confident in achieving our growth objective of 20% plus. Now I will request Mr. Ramesh Birajdar, CFO to take you through the financials.
Ramesh Birajdar — Vice President & Chief Financial Officer
Good evening. The presentation outlining key Trends observed in Q4 and FY26 results has been uploaded to the Investor section of our company’s website. Additionally, following today’s board meeting, the financial results have been duly filed with the BSE and nse. These disclosures provide comprehensive details on the company’s performance. Quickly, I will run through the business result for Q4 and the year ended on 31st March 2026. Sales for the Q4FY26 were rupees 706 crore against 583 crore of Q4FY25.
Sales for Q4 also showed a growth by 21% over the previous year Q4FY25. Other income for Q4 is almost same for both years. Rupees 6 crore in FY26 against rupees 5.7 crore in FY25. Total income for Q4FY26 was at 712 crore compared to rupees 588 crore in the previous year. There is major reduction in the percentage of raw material to sales for Q4FY26 compared to Q4FY25 50.06% in Q4FY26 against 56.35% in Q4FY25. However, the YTD percentage of raw material sales has improved by 3.1% in FY26 due to better product mix, better selection of orders, execution of large packages and overall cost saving efforts on account of backward integration of manufacturing in Nasik as well as in Sasser plant.
Stop cost I.e. ERE stands at 53.1 crore in Q4FY26 I.e. 7.5% of total income against rupees 45.5 crore in Q4FY25 I.e. 7.7% of total income. Employee related expenses for the year to date rupees 200 crore representing 11.2% of total income as against 177 crore that is 10.7% in FY25. This rise in driven by salary increment and increased headcount. Company has incurred rupees over 165 crore in last two years leading to increase in the depreciation to 31.1 crore in FY26 as against rupees 28.9 crore in FY25.
We continue to invest in CAPEX to support growth and to meet our commitment towards new product development under the PLS scheme YTT other expenses are mix of fixed and variable cost and are at 326 crore in FY26 against rupees 308 crore in previous year. Increase in these expenses are mainly search and execution of large packages, enhanced level of after sales business, growing O and M business and expanding activities on our Nasheek and Sasser plant. The year to date performance for the current year shows an improvement in the EBITDA margin reaching 21.7% of total income to rupees 388 crore compared to 19% of total income to rupees 313 crore in the previous year.
The YTT profit before tax has reached rupees 356 crore constituting 19.6% of total income against 17% to rupees 284 crore in the FY25. Net profit after tax for FY26 is rupees 258 crore that is 14.50% of total income in comparison to previous years rupees 281 crore that is 12.8% of total income. Company has maintained the status as a debt free company and I would like to state that company has still net cash position of cash and cash equivalent of about rupees to 460 crore as on 1st April 2026. The Board of Director has approved subdivision of equity shares of face value of rupees 2 into face value of rupee 1 subject to accrual by the shareholders.
The company issued 60,800 equity shares during the year FY26 previous year 1,24,300 shares issued under the employee Stock Option Program. As a result there is marginal increase in the paid of share capital to rupees 12.9 10 Sparrow against last year of 12.98 crore YTD earnings per share, I.e. EPS for FY26 has shown growth by 22% reaching to 39.80 paise per share while 32 rupees 50 paise per share was earning in the previous year FY25. In line with our dividend policy, the Board of Directors has approved a final dividend at the rate of 425 on the face value of rupees 2 per share that is rupees 8 rupees 50 per share per share.
This is in addition to payment of interim dividend which is already paid at rate of 175% that is rupees 3 rupees 50 paisa. So the total dividend for FY26 is 600% which is highest in the history of the company. Final dividend is subject to approval by shareholders. With about 93.4% of total income coming from the compression segment, it remains only reportable segment and segment earned operating profit of 24.9% in FY26 higher than the previous year when it was 21.7%. The compression segment showed a higher profitability.
This is being a one timer for Q4. However, as indicated from time to time completion business margins are sustainable in the range of 18 to 20%. As of 1st April 2026, the company’s unexecuted order board amounting to rupees 1863 crore and increased by 15% from 1624 crore recorded on 4-1-25th. Net unallocable assets are including cargo assets and assets of a precision component business division to the tune of 834 crore. Exception regarding the implementation of the new Labor Code that become effective on November 21, 2025, we have completed our current assessment.
The estimated return on provision has been reduced by rupees 4.2 crore in Q4 resulting in total provision of rupees 14 crore for FY26 which is pertinent to the prior year period. While the impact of FY26 is recorded in ere cost comparative statement of consolidated business for Q4 as well as for the full year are also published. We are working on reorganizing the restructuring of our subsidiary to get the results expected projected while acquiring the company. This will take some time to get positive results from our subsidiary company.
Before I conclude, I would like to place on record my sincere appreciation for our teams across operational finance, supply chain and sales and marketing whose relentless focus and disciplined execution continue to drive our performance. I would also like to extend my appreciation to our chairman, Mr. Rahul Kildaskar, the board members and our investors for their continued trust and support as we work towards building a stronger, more resilient and future ready organization. I would also like to acknowledge Mr.
K. Sreenivasan, former Managing Director, for his constant encouragement and for shaping the company’s mindset to impress challenges and pursue ambitious growth. Thank you so much for joining today and we’ll now open the floor for questions from our investor.
Questions and Answers:
Operator
Thank you. We’ll now begin the question and answer session. Anyone who wishes to ask question may press star and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handset while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assemble. The first question is from the line of Priyank Cheddar from Valium Capital. Please go ahead.
Priyank Chheda
Yeah hi Dean. So I have just two questions. First on the order book would you want to call out the book to bill or say execution cycle which has shortened significantly versus past few years. Just trying to match and map what would be the executable order from the opening order book that we have from as on the 1st of April. And Ramesh sir, just a clarification. In this order book have we included the precision engineering orders? If yes, then would it be able to quantify that?
Ramesh Birajdar
Okay. And second question
Priyank Chheda
We can. I’ll ask the question after this question is answered. Okay.
Ramesh Birajdar
This 1863 crore order board as on 1st April is inclusive of decision component business and out of this roughly 500 crore is executable beyond FY27 and remaining it is executable in this year and continuously focusing on the equipment business where it is a touch and go where roughly the 600 to 700 crore business we get it during the year we exhibit and we dispatch for the sales.
Priyank Chheda
Okay. So which means that out of 1860 crores executable order book 500 crore order book is beyond one year and the balance 1300 crores is minimum executable within say less than one year.
Ramesh Birajdar
Yes, this is what a similar trend what we have in last so many years.
Priyank Chheda
Understood. My second question on the products and high hope products that we had to you know as a strategy to scale up the revenues. First. First is Zephyros. What would be our the GTM strategy Because I understand that FY27 would be capex here and FY28 is where the full flat Sales starts. So if you can just touch upon the sales strategy that we plan to deploy to scale up this and what are our ambitions in terms of scaling up the sales and second would be on the centrifugal compressors. If you can just call out FY26, how much is the sales unit that we have achieved?
What are the sales targets for FY27 and maybe Aman can touch upon just any other products that we should hope to achieve a large sales numbers and become a and have a larger sales contributions coming from any other new innovations that we are planning to launch. Thank you.
Aman Kirloskar
Yeah, thank you. So I’ll start with the Zephyrus. So just to reiterate, Zephyros is a fairly innovative air conditioning package which uses a green refrigerant and is significantly more efficient than let’s say traditional chiller systems. Our go to market strategy here would really be engaging with all the stakeholders I.e. Consultants, architects, installers and probably before that in this financial year we do have a target for how much we wish to sell and this would be done largely by interfacing with builders and finding the right target markets for this.
So probably the ideal markets as of now with our current range would be smaller machine shops and you know, small restaurants, banquet halls, etc. There is quite a large potential for Zephyrus and we will slowly build out a channel as we get more volumes on the test. Atli Poca we have about 130 machines in the field. Sorry, 130 machines in the field of which 85 have been commissioned. I hope that answers your question.
Priyank Chheda
And any other product which you think should be focused going ahead as a large part of sales credit.
Ramesh Birajdar
If you remember Priyank last mini meetings the indication is we are switching towards the equipment business where the exhibition cycle is very shorter period and our target is to take out something 20 to 25% business coming out of this equipment business where the exhibition cycle is very short. The same trend will continue because Tej, Katlipa Kuhn, the Tai Chi. Then again it is jpros. All this is part of a equipment business and equipment business we just touch in, we just get the order exhibit and we dispatch that focus we are increasing and that increasing focus will sustainable over the period of next few years.
Priyank Chheda
Thank you.
Operator
Thank you. The next question is from the line of Bala Supramanyam from Aryan Capital. Please go ahead.
Balasubramanian
Good evening sir. Thank you so much for the opportunities. Sir, on the first side if I mentioned ideal market, smaller machine shops and restaurant. So I’m trying to understand in this business like how we. I think our current PP is around 357 crores. We have committed Capeka for 320 crore. And I’m trying to understand whether these are the small small orders we can get answer across. How do you look at ROCE and payback period of these 320 crore investment and whether we can expect substantial contribution from FY27 or FY28 onwards.
Ramesh Birajdar
Okay. The 320 crore is a commitment for the P Eli scheme. What we did and we developed the product. One is JPROS that is air conditioning package and the second is the motor. Again it is developed the JPROS two packages we already installed. One is of Sarsat Canteen and one office in Huddershad. Both are absolutely running very fine. There is no issue in the air conditioning package. And this Jepro system is giving another opening for our new business segment. So far we are into the refrigeration business with the kc, KC X and all other products.
And now we are entering into the air conditioning and that is the comfort and that business will grow. And that is why focusing on that and for the Zebras the backward integration we are doing in the form of motor, in the form of heat exchanger and in the form of sheet metal components. Some of the activities we planned in the Password plant and some of the activities plant in the Nasik plant. And out of the 320 roughly 60 crore we already incurred for this and remaining we are targeting to incur in another two years time the commercial of this air frost will happen in Q1.
We have a separate team for this working along with appointment of the dealers, appointment of the team and the express team. We already on the board and the team is working to execute the Jepros now.
Balasubramanian
So on that payback period and ROC side whether we can expect 25 to 30% kind of margins since it’s like small orders.
Aman Kirloskar
Yeah. So in this sector. Yeah, sorry. In this segment, considering that it is a highly competitive segment we probably will not be targeting those kind of margins. However, we will try and target very high volumes. These are volumes which KPCL generally has not done. So on the margin side it may not be as high but on the volume side it should make up for it.
Balasubramanian
Okay sir. So my second. I think earlier we have mentioned incremental capacity for test catalytic poker will be available from Q1 whether all the machines we have installed for this segment. And secondly, what is the current order pipeline for the new A800 smallest centrifugal frame.
Aman Kirloskar
So in terms of the Installed capacity. This has been done and it is now available. The machine has been commissioned as well. Coming to the A800 frame, I think we still need maybe one month or so to really get the product launched. But I think there is quite a bit of demand for a smaller centrifugal. This will be most efficient offering for an 800 CFM compressor.
Balasubramanian
So my last question on the export sales, 140 crore after of this, how much percentage is coming from Nana regions? Because it’s majorly a significant part. It’s from Nana regions for CNC packages. So I’m trying to understand how much percentage comes from in those areas. And secondly I just want to confirm that non traditional orders are leveraging practical integrations like forging machines and ensemble. Whether just want to confirm whether it will be reportable segment from Q1 onwards. Q1 FY27 onwards.
Ramesh Birajdar
For that you have to wait up to Q1 will definitely disclose AS and will achieve. But definitely there is a good progress on that part and definitely it will come under the reportable segment from Q1 outwards. Regarding the export, we are not fully dependent on the MENA region. We are focused on the Southeast Asia. We focus on the African region and MENA region we little bit less because we right now the situation is different. So always to focus on different and new niche area for the export.
Aman Kirloskar
Yeah. So the MENA region was definitely a fairly large, large part of our export sale. However, considering the current geopolitical environment, we have shifted our focus to different regions like Southeast Asia and the North Africa part of mena. We are still in active discussions for several orders in the Middle East. However, considering the current situation, these are growing quite slowly and I suspect that once the geopolitical situation in the Middle east cools off, we will start to see some rapid movement in this segment.
Balasubramanian
Thank you so much for detailed explanation, sir. All the best.
Aman Kirloskar
Thank you.
Operator
Thank you. The next question is from the line of Samir Thakur from Ambit Capital. Please go ahead.
Sameer Thakur
Thanks. Just to carry on with the previous question, so this Middle east exposure, can you just get into details of what kind of products you have or whether do you have approvals from let’s say Aramco or Qatar Energy or any certifications which kind of at the end of the war whether that can help you to start rebuilding the capacities or would that help you?
Aman Kirloskar
Yeah, so let me put it like this. So with regards to the geopolitical situation in the Middle east, there is a near term pressure. As I had mentioned previously, it is difficult to Dispatch packages for orders we already have over there. And it is also difficult to book new orders. However, long term this will augur well for us on two fronts. One is on the international side. As you rightly pointed out, there will be a demand for let’s say gas packages going into some of these countries. There is also a renewed interest in the domestic market in let’s say alternative fuels like biogas, coal, gasification, hydrogen, etc.
On top of a real push which is quite visible today in the upstream segment of the domestic market. I hope that answers your question.
Sameer Thakur
Yeah, that was helpful. And there’s one more just going to the backlog mix, is it possible to get a separate mix or by division? I think there is a lot of backlog from the other division from Precision Components. So I was just trying to make sense and what is the margin in this Precision Components? Is that marginality business
Aman Kirloskar
In. In. Sorry, I was not able to hear. You’re asking for the margin of systems and components.
Sameer Thakur
There’s a backlog mix by separate divisions, if that is possible to give. Okay,
Aman Kirloskar
Sorry, go ahead.
Sameer Thakur
No, my sense is the. The backlog is driven by maybe the other segment which is Precision Components. And I just want to take a sense whether this Precision Engineering division, components division, whether it has lower margin than your core business.
Aman Kirloskar
So we generally don’t give a breakup of segments. However, as we had pointed out last year, we did have to go to non traditional segments to get orders. In terms of margins, I would say that from a company standpoint we will be around directionally 18 to 20% as we have guided in the past.
Sameer Thakur
All right, that was all from the side. Thank you.
Aman Kirloskar
Thank you.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address question from all the participants in conference, please limit yourself to two questions. Should you have a question to follow up, we request you to rejoin the question queue. The next question is from the line of Amit Anwali from PL Capital. Please go ahead.
Amit Anwani
I thank you for the opportunity to. So first question about the oil free compressor you talked about in your opening remarks. Just wanted to understand is it a completely new product and did we got some saves from this and what is the opportunities? If you could highlight more about this oil free compressor which you highlighted. Yeah,
Aman Kirloskar
Yeah. So the compressor which we are referring to is branded as Hydreno. It is a water injected screw compressor largely used in applications in food processing and pharmaceuticals. In terms of. Is there let’s say a similar category in the market? Yes, there is. We do have some competition who have similar products. However, we have several unique USPs in this product. So one is that, you know, we have no oil in this machine at all. Our competitors may have oil in their bearings, etc. And you know, we are also domestically produced which means that not only are we generally more cost competitive, but we are also able to offer service and spares to customers much faster than imported machines.
Amit Anwani
So is this the completely new product launch or this was there and now this is
Aman Kirloskar
A new product. This is a new product for kpc.
Amit Anwani
Understood and wanted to understand. So we have been talking about Testcatly, Polka, Tai Chi and now Life Rose and I think few other products like qna over past 24 months. Just wanted to understand now since these products have been kind of there in the market what kind of sustainable growth you’re targeting from these products. Obviously category wise within air refrigeration and all these new launches which are there in the market. If we take let’s say two years of perspective, what is our standing currently in terms of market share or revenue for each of these products and what kind of growth we can look forward in these products?
Aman Kirloskar
Yeah. So you know, in our segment in terms of capital goods, especially compressors, these are really products which are designed to run and you know, they have to prove themselves before they gain broader market acceptance. So it’s usually the case where getting the first few orders is hard and then it gets progressively easier from there. All these products you mentioned with the exception of Zephyrus are now in the market and we will start to see we are already growing Tezcatlipoca quite aggressively.
Kion as well, we are seeing good growth. Tai Chi, we did launch last year, so we did grow, but it was from zero. And so I think generally from new products we target that we should have at least 10 to 15% of sales and as a company we want to grow at 20%. These products, depending on how old or how recently they were launched, would grow at a slightly higher pace.
Amit Anwani
Right. Lastly on the precision engineering division, what exactly we are looking as a strategy. So I think you explained about 500 crore order there and probably it’s a short cycle order. So can we expect F27 also getting order inflows as high as, you know, 500 upward again for the precision engineering or this is just a one off case this year.
Aman Kirloskar
Yeah, so the reason which we are, the reason why we are being quite opaque on this is because we don’t really know whether it is sustainable. So I think for that we’ll have to really go forward and see. But certainly in terms of precision engineering, we have many unique capabilities with us. Whether that is in forgings, castings, machinings, etc. So there will be a stable demand, but I cannot really foresee whether it will be to the same extent.
Amit Anwani
Right. Finally, in terms of the current geopolitical situation, which is sensing anywhere you feel that this would be a key risk in terms of business, whether it is increase in cost or the conversions with their key industries, any sort of challenges. Because we saw F26, we had different kind of challenges in terms of delays in packages. So anything which in near term you might feeling that could impact the business because of the geopolitics politics getting stretched from more than two months now,
Ramesh Birajdar
The order board last year beginning it was 1624 crore. And now for the beginning of this year it is 1863 crore. So despite all this situation, uncertainties, geopolitical uncertainties, still we are here order board compared to the last year regarding the price increase, we always focus on that and whether it is a short period of the execution we pass on to our customer and we don’t take into our account. And as far as the large package is concerned, we already negotiated, we already finalized the orders with our vendors, so.
So there is no directly impacting our profitability.
Amit Anwani
Right. So this year are we also focusing back again on the large packages as a part of inflow or now we’ll be keeping this lesser package order and more equipment order as a norm for F2728?
Aman Kirloskar
Yeah. So as a strategy we always want more products versus packages simply because it makes the the business less lumpy and more predictable. That being said, the demand environment for packages does seem to be seem to be higher on the back of let’s say lower orders getting finalized last year. So even though directionally we do want to have more products versus packages this year, as of now, we do have quite a few inquiries out there for packages.
Amit Anwani
Understood. Thank you. Thank you so much.
Operator
Thank you. The next question is from the line of Bhavya Doshi from Chris. Please go ahead.
Bhavya Doshi
Yeah, so like are we seeing like which segments are contributing more to the stronger order inflow which we have experienced in FY26? And is there a strong traction in the CNG stations, like are we again bidding for the mother stations which saw a higher competition earlier?
Aman Kirloskar
Yeah. So in terms of orders for the last financial year, they would broadly be in line with the numbers which I had mentioned in terms of the business contribution. However, this Year we did have good numbers coming from the precision engineering division. We generally don’t like to give a breakup, but it would largely be ACR, then precision engineering, then gas, etc. On the CNG, we are actively bidding and there is a renewed interest, as I was stating earlier, to increase the amount of CNG stations.
So there is a push from various customers to close more orders and we have been actually closing more orders in the CNG space in the last quarter and even carrying on into this year.
Bhavya Doshi
Got it, Got it. And as we had mentioned, we are targeting around 10 to 5%, 15% of the sales of the company going ahead from the newly launched products. So given the strong IP filing which we have done in the last few years, how does the launch pipeline look like for the new products and how’s the pathway ahead?
Aman Kirloskar
So we have a number of products which we are actively developing. That being said, a lot of them vary in terms of levels of complexity. So the more complex it is, it generally takes longer with more testing, etc. We also have a couple of products where we are expanding the range. This is something which will definitely come faster. So we do have quite a. So it’s very difficult for me to commit at this stage what products we will launch this year. I think I already did mention the A800 which is an extension of our centrifugal range.
But we do have quite a few products in the pipeline which you will start to see Some launches in Q1 itself.
Bhavya Doshi
Got it. And one last thing is like how much cost savings does a Zephyrs package offer as compared to the conventional system for the end users? This just a broader perspective on it.
Aman Kirloskar
Yeah. So the Zephyrs package is actually significantly more efficient than a traditional water chilling system. It would be in the range of, let’s say 10 to 15% plus.
Bhavya Doshi
Thank you. Thank you. Thank you so much.
Operator
Thank you. The next question is from the line of Mihir Manohar from Trust Mutual Fund. Please go ahead.
Mihir Manohar
Yeah, hi. Thanks for giving the opportunity and congratulations to the entire gross Chronomatic team for great set of numbers. My question was on the CNG and PNG and CGD side, once again, government is putting the focus because of the disruption which has been there. If you can throw some light as to when there’s a demand for compressor actually kick in. I mean is the laying of large transmission pipelines and store gas transmission pipelines necessary for the demand of other compressors to actually kick in or is it going to the booster compressor only some clarity over Here would be helpful.
Ramesh Birajdar
Maybe we could not hear properly. Will you try again? There are some disturbance from your side. Will you try this audible
Mihir Manohar
Now? Yeah. Is this audible now?
Ramesh Birajdar
Yeah, yeah, it’s okay now.
Mihir Manohar
Yeah, yeah, sure. So first of all, congratulations on a great set of numbers to the entire team. Quite good set of numbers on revenue and backlog both. Mainly wanted to understand on the CGD and PNG side, I mean government has put a renewed focus over here because of the disruption which has happened. Now I wanted to understand when does the demand for mother compressor actually kick in? Is laying of large transmission pipelines, gas transmission pipelines necessary for the demand of mother compressors actually to kick in?
I mean is the demand going ahead for the next, let’s say one to two years? Now government has put a focus again. Will it be mother compressors or will it be booster compressors?
Aman Kirloskar
Okay, let me try and answer your question. You do need pipelines for mother stations and generally the trend that we see is that 70% of new stations, at least 70% are generally daughter stations because these are lower in capex. But the disadvantage with the daughter station is that they are higher in OPEX because, because you need a mother station to first compress the gas, fill it into a cascade and take it to a place which has a daughter station. So there is also a trend of over time daughter stations being converted into mother stations.
There are, there is a certain market where it’s very difficult to put pipelines like in a hilly area etc. So there, that would be a daughter station. I hope that answers your question.
Mihir Manohar
Yeah, yes, but I mean with now a full infrastructure rollout going to happen, at least on the framework and the policy, it seems it will result into higher demand for mother compressors or for booster compressors.
Aman Kirloskar
Yeah, it will be higher demand for both but it would in the short term be skewed more towards daughter stations. But long term a lot of them will start getting converted into mother stations.
Mihir Manohar
Okay, understood. Second question was on the good order inflow, I mean Quite good number, 650 crores, broadly over the last two quarters. If you can throw some light as to, you know, what value is contributed by the new products. I mean Texi, this new range of compressors that we have introduced some color over there and you know, what number are these new products contributing over the last two quarters?
Aman Kirloskar
Yeah, so generally we don’t, we don’t really give such granular information. A lot of these products which you mentioned are newer products and as I mentioned earlier, it’s Usually very difficult to get the first few sales especially in you know, let’s say products like Tai Chi Hydreno which were just freshly launched. Tezcatli Polka is certainly higher up in terms of the order value and it also continues to grow quite quickly. Yeah, that’s, that’s I think the most granular that I can go.
Mihir Manohar
Just lastly a question on the precision engineering side.
Operator
Mr. Manor Manor. Please rejoin the question queue for more questions. Thank you. Okay,
Mihir Manohar
Thanks. Thanks. Yeah, yeah.
Operator
The next question is from the line of Bharat Shah from BCS Capital Ideas limited It. Please go ahead.
Bharat Shah
Yeah. Hi Aman. I think this is beginning of new innings with a bank. I think one couldn’t have asked for a better start to the all altogether new innings that you are about to play. I’ve known Shiny for more than 25 years and I’ve seen him to be a very meticulous and very careful planner of the things. So I, I definitely believe he, he would have set up these organization on a beautiful firmament for you to play the innings at a much higher place window or at least that is what my, my hope is. So first and foremost, best recession and congratulations on this lovely note on which the picture started.
Aman Kirloskar
Thank you.
Bharat Shah
Yeah. On the growth aspect you talked about 20% plus on a sustainable basis. So you meant for the current year or more like five to five years and more. Because all along over last few years I’ve understood that these growth rate for the company could be upwards of 20% given the engineering strength we have, given the way the overall manufacturing ecosystem is rapidly evolving and given the fact that in many ways what Kiloska Pneumatic does is touching so many other industries and their needs and the innovation rate of the new products.
So is the, are we being kind of more modest and conservative or you think this is the most realistic which we should assume.
Aman Kirloskar
Yeah. So when I had said 20% in the opening comment, it has always been our aspiration to grow the company at 20% plus over a long period of time. That is on top line and bottom line.
Bharat Shah
Okay. And coming to that part, now that we have reached a meaningful scale in size today and the overall manufacturing ecosystem evolution has been rapidly proliferating. Thus our own innovation rate of the new products. Should we, should we be more ambitious than this or in your opinion? I think this is very realistic and practical and strong number that we are talking about.
Aman Kirloskar
Yeah. So in terms of innovation, as I mentioned we have been recognized as a top 30 IP driven organization. That being said, this is not all we want to be, we have our own internal targets to grow the amount of IP filings. Some of the products which we are developing today would be cutting edge not just in India but in the world. And I think, you know, I’m really excited when I look at some of the products under development and I do hope we’ll be able to launch a few of these really cutting edge ones this year.
Ramesh Birajdar
I will add something relating to this coming to innovation. We are giving the presentation to IFCI for the JPROs where they are availed the PLR scheme approval and the one of the managers there asked us who is your technology partner for the jpros? And we said there is no technology partner. Our team is capable to do the innovation, do the engineering and we have developed this product our own. And it was so surprised from them that Indian company is doing such type of innovation and the PLR scheme which is approved so easily that one Indian company doing so much of innovation and coming with the different products and they appreciated our efforts.
Bharat Shah
Absolutely delighted to hear that. Absolutely delighted. This one last small thing if I can raise that. While clearly the margins in the latest quarter, the fourth quarter of the year gone by at about 26% plus are dramatically high and those can’t be sustainable but year in entirety at about 21 and half or percent that we have delivered for the entire year of 2526, isn’t this now on a decent top line base with operating leverage and specialty product offerings and the overall growth opportunity isn’t.
I’m aware that Aman mentioned 18 to 20% is more sustainable margin but I thought 21.5% margin is that not likely to be prevalent for a while or you think 18 to 20% only should be a fair guidance.
Aman Kirloskar
Yeah, so just to clarify what I meant is you know in a bad quarter we always say don’t judge us quarter to quarter. That in the same way in a good quarter please don’t judge us quarter to quarter and directionally we will be 18 to 20% and if we can we’ll be 21%.
Bharat Shah
Thank you so much. And Aman, all the very best.
Aman Kirloskar
Thank you sir.
Bharat Shah
Thank you Ramesh bhai.
Ramesh Birajdar
Thank you.
Operator
Thank you. The next question is from the line of sort of Arya from Oakland Capital. Please go ahead.
Sourabh Arya
Yeah, hi sir, am I audible?
Ramesh Birajdar
Yes, yes,
Sourabh Arya
Go ahead. Congrats on good set of numbers. See again if we see last few calls you have said Mr. Shrini has also mentioned that export would not be really a big driver for us. Does things change with the, you know Disruption in Middle East. So if you could double click on your Middle east export opportunity and export opportunity in general. So first is that maybe. And then maybe. I have a related question after your comments.
Aman Kirloskar
Yeah, so I think export as part of total sale is about 6%. Since one of our major markets especially for large packages is oil and gas, the Middle east is certainly a key market for us. That being said, because it is not a very large part of our total business. It is not that big of a risk for us with the current geopolitical situation. And as I said earlier, I think in the long term the implications of the geopolitical unrest in the Middle east is probably quite good for kpcr.
Sourabh Arya
Okay. And maybe related is when it comes to you know these approvals etc for these packages because you already have, you already are using compressor of area or maybe you know how and they are of course already approved here. So why like. So I want to understand have we won any package in past in Middle East. If not why we did not win in past and what gives us confidence that you know that now we have a bigger.
Aman Kirloskar
Yeah we have won packages in the past and we have a couple of active inquiries also going on. What I will say is that you know what is more active in the Middle east is more on the gas side and then on the gas side there’s a number of, you know, a number of approved vendors. A lot of them are from lower cost countries. It makes it a little bit difficult for us to compete when you know everything is specified. So you have to get the compressor from a certain vendor, you have to get the engine from a certain vendor, exchanges from a couple of vendors.
So with everything specified it becomes very difficult to kind of innovate on the cost side and the gas packages. That being said, you know we are competitive enough to be able to win and we have won packages from the Middle east in the past.
Sourabh Arya
This is very helpful. Second, just again a clarification bit on other side. I know we don’t want to talk more much about it but still like the first number Ramesh sir mentioned about 500 crore order book for next year. So I want to understand like from the execution cycle perspective what is going into next year. Mr. Ramesh did mention that in past also that has been the case. But still if one were to see execution cycle of this other segment is it more than your base business and majority of this 500 crore which is going into next year belongs to others.
Aman Kirloskar
No, I think there’s some misunderstanding. As I mentioned the total order Board, if you go into details is actually more skewed towards products this year. What that and products generally have a shorter execution cycle. We did get a couple of large package orders which will spill over into the next financial year. But the execution cycle this year for the company should actually reduce.
Sourabh Arya
Okay. And maybe if I can speak last like last year also let’s say, you know our order book was 1600 crore something book to bill of around one and we were pretty confident that revenue growth would be 20%. And now again at the start of this year book to bill is around one and we are pretty confident that we can still do 20% offline growth. So what happened last year that it did not come and what gives us confidence that with the similar book to Bill we will actually be again deliverable? Thank you very much.
Aman Kirloskar
Yeah, so I think the past few years we’ve had quite a significant reliance on our gas business. And as we have been calling out, this is a place where we have been having some difficulties in terms of growth. We will be taking some actions this year to increase our competitiveness and in the segment and I think all the other businesses are doing fairly well. Equipment in particular is growing. And this year with the precision engineering division really doing a lot of heavy lifting, we believe that we will be back on track to deliver higher than order board sales and reach this 20% plus number which we are committing.
Sourabh Arya
Perfect. Thank you very much.
Aman Kirloskar
Thank you sir.
Operator
A reminder to all participants, please restrict yourself to one question. Thank you. The next question is from the line of divyam chain from 361 capital. Please go ahead.
Divyam Jain
Yeah. Audible. Yes
Operator
Please.
Divyam Jain
Yeah. So my question was regarding the gross margin expansion that we’ve seen sir. How much of it would be owing to the background integration efforts and how much of it and if is it attributable to the development of orders? I believe it has practiced. How would you attribute that function?
Ramesh Birajdar
So we are not able to understood what exactly you are asking.
Divyam Jain
So we saw 600 groups expansion in the gross margins I believe in this quarter how much of it is attributable to the backward integration efforts and how much of it is because of the deferments that we’ve seen that you reported in the last quarter.
Ramesh Birajdar
Now the backward integration what we did in Masic is coming to Hadassa for the air compressor division as well as for the transmission division that is PED now. And roughly the total output from the Nashik is directly coming as an input for a Hado factory as less some portion is going to the Sasor also. So it is exactly. We are not calculated how much is going for the compressor division and how much is for the ped. So we need some time to calculate and come back to you for that. Sir,
Divyam Jain
Answer. What would be our sustainable gross margin?
Aman Kirloskar
Yeah, so as we have been saying directionally we want to be 18 to 20% on an EBITDA level.
Ramesh Birajdar
Last year we also achieved margin in the core business. That time you also said that 18 to 20% is sustainable. This quarter also we crossed almost 23% and still we are saying it is 18 to 20% is a sustainable for core business. That is compression business.
Divyam Jain
Thank you.
Operator
Thank you. The next question is from the line of Sahil Sanghvi from Monaj Network Capital. Please go ahead.
Sahil Sanghvi
Hi, good evening. Am I audible?
Ramesh Birajdar
Yes, please go ahead.
Sahil Sanghvi
Yeah. Congratulations for a very good set of numbers and congratulations to Mr. Aman Kailoskar for the new designation. My question is more of to understand, I mean while Aman has already commented on this, but this new ruling that we have got regarding the government’s press on the March 26th order for, you know, fast pacing more PNG and PGD lines, I just, I just wanted to understand what kind of traction are you seeing on ground with this, with this ruling because it says that they want to accelerate pipeline infrastructure development including faster rollouts of CGD and last mile connectivity for png.
So what are you seeing on ground and when can you expect some bit of demand transferring to our order book leading to an improved performance for the process gas division?
Aman Kirloskar
Yeah, so as I mentioned, I think we entered this year with an elevated inquiry level in terms of the domestic gas business. And we’ve also been closing some orders in this segment fairly quickly. So I think on ground there does seem to be quite a bit of things happening. And I’d also like to once again mention that there is a lot of interest in alternative fuels, especially biogas, where we are seeing a lot of interest at the moment. It has not translated into orders for us yet.
Ramesh Birajdar
You must have also seen, you must have also seen the release, first release by the ONGC. Roughly they are targeting to invest something 200 billion in oil and gas. And that 2 investment will come between 5 to 6 years and this 200 billion investment. Then they will start investing. Some portion of this will come to us as a support for the compressor to their various projects. So we are definitely going to going to get that because the 200 billion investment by oil and gas sector by government of India is a huge investment.
And we are also Focusing on that to get that business and to grow our company.
Sahil Sanghvi
Got it. Got it. And my last question would be, I understand that we will have a shorter execution cycle for the orders that we have now in our order book. Can you define that period? I mean would it be six, seven months or would it be much, much lower
Ramesh Birajdar
Equipment? Period is between four weeks to something 12 weeks. And roughly the large packages ranging from six, seven months, eight months. But as we are growing we are being developed in many products like Taste, Catalyboca, Kion, Taiche. They are having very short execution cycles. They are not very great. 8 months, 12 months period there it’s not the case. We are not focusing on the large package business. Whatever business we want, we want a top line growth as well as the bottom line growth.
Both.
Operator
Thank you. Due to time constraint, we take that as a last question. I now hand the conference over to Mr. Tirinda Tiwari for closing comments.
Dhirendra Tiwari
Thank you. Let me take this opportunity to thank the management of Krilloskar Pneumatic for giving us the opportunity to host. Before I close, may I invite Aman to and then we can close the call.
Aman Kirloskar
Yeah. Thank you all for joining the call today. And as Bharat Bhai had mentioned, it is a new innings for me and I have been blessed to have a great boss and mentor of Mr. Srinivasan for the past five years. I think we learned a lot. He really taught us how to push boundaries, innovate and really be hungry for growth. So we have big shoes to fill and we will do our best to to hit our targets of 20% plus growth. Thank you so much.
Dhirendra Tiwari
Thank you. Now we can close the call please.
Operator
Thank you sir. On behalf of Antique Stock Broking Ltd. That concludes this conference. Thank you for joining us. You may not disconnect your lines.