Are Kilburn Engg. latest results good or bad?

Kilburn Engineering's latest financial results for the quarter ended September 2025 reflect a strong operational performance, characterized by significant growth in both revenue and net profit. The company reported net sales of ₹153.60 crores, marking a year-on-year growth of 48.02%, which is notably higher than the broader industrial manufacturing sector's performance. This growth trajectory indicates robust demand for Kilburn's specialized drying systems and engineering solutions.
Net profit for the quarter reached ₹26.88 crores, representing a year-on-year increase of 76.61%. This demonstrates effective cost management and operational efficiency, as evidenced by the operating margin, which stood at 25.90%, slightly above the previous quarter's margin. The company has managed to stabilize its margins above the 25% threshold, suggesting a strong profitability profile.

Kilburn's return on equity (ROE) averaged 18.63%, reflecting efficient capital utilization and positioning the company favorably within its peer group. The return on capital employed (ROCE) also remained healthy at 17.57%, indicating effective use of capital to generate profits.

However, the company reported negative operating cash flow of ₹9.00 crores for FY25, a reversal from the previous year's positive cash flow. This situation highlights the working capital intensity associated with its growth phase, as the company has absorbed significant working capital to support increased operations.

In terms of evaluation, Kilburn Engineering experienced an adjustment in its evaluation, reflecting the company's operational achievements amidst a backdrop of stretched valuation multiples. The financial results underscore Kilburn's successful execution of its growth strategy, although investors should remain vigilant regarding the implications of its high valuation and working capital dynamics as the company continues to scale its operations.