Current Rating Overview and Context
On 03 November 2025, MarketsMOJO revised Kirloskar Brothers Ltd’s rating from 'Hold' to 'Sell', reflecting a shift in the company’s overall assessment. The Mojo Score decreased by 3 points, moving from 50 to 47, signalling a more cautious stance on the stock. This rating encapsulates a comprehensive evaluation of the company’s quality, valuation, financial trend, and technical indicators.
It is important to note that while the rating change occurred several months ago, the data and performance metrics presented here are current as of 22 February 2026. This ensures investors receive the most relevant and actionable information when considering Kirloskar Brothers Ltd in their portfolios.
Quality Assessment: Below Average
Kirloskar Brothers Ltd’s quality grade is currently assessed as below average. This reflects challenges in operational efficiency and profitability metrics. The company reported flat results in its December 2025 quarter, with Profit Before Tax (PBT) less other income falling by 20.47% to ₹108 crores. Additionally, the Return on Capital Employed (ROCE) for the half-year ended December 2025 stands at a relatively low 22.91%, indicating subdued capital efficiency compared to industry peers.
Such figures suggest that the company is facing headwinds in maintaining robust earnings growth and operational leverage, which weighs on its overall quality score.
Valuation: Fair but Not Compelling
The valuation grade for Kirloskar Brothers Ltd is rated as fair. While the stock does not appear excessively overvalued, it also lacks significant undervaluation that might attract value-focused investors. Current market capitalisation categorises the company as a smallcap, which often entails higher volatility and risk. Investors should weigh the fair valuation against the company’s earnings trajectory and sector outlook before committing capital.
Financial Trend: Flat Performance
The financial trend for Kirloskar Brothers Ltd is described as flat, reflecting a lack of meaningful growth or deterioration in recent quarters. The company’s latest quarterly results show stagnation, with no significant improvement in profitability or revenue growth. This flat trend is a concern for investors seeking companies with strong upward momentum in earnings and cash flow generation.
Moreover, the stock has underperformed the broader market over the past year. While the BSE500 index has delivered a healthy 11.96% return in the last 12 months, Kirloskar Brothers Ltd has generated a negative return of -11.37% over the same period. This divergence highlights the stock’s relative weakness and the challenges it faces in regaining investor confidence.
Technical Outlook: Mildly Bullish but Limited
Technically, the stock exhibits a mildly bullish grade, suggesting some positive price momentum in the short term. For instance, the stock gained 8.14% over the past month, indicating sporadic buying interest. However, this short-term strength is tempered by negative returns over longer periods, including -8.11% over three months and -18.89% over six months.
The one-day change as of 22 February 2026 was a slight decline of -0.14%, reflecting ongoing volatility. Investors should interpret the technical signals cautiously, recognising that the mild bullishness does not yet translate into a sustained uptrend or a reversal of the stock’s longer-term downtrend.
Implications for Investors
The 'Sell' rating from MarketsMOJO indicates that Kirloskar Brothers Ltd currently faces multiple headwinds that may limit its near-term upside potential. Investors should consider the below-average quality, flat financial trend, and fair valuation as signals to exercise caution. While the mildly bullish technical grade offers some hope for short-term price support, it does not offset the fundamental concerns.
For portfolio managers and individual investors, this rating suggests that Kirloskar Brothers Ltd may not be an attractive addition at present, especially when compared to other opportunities within the compressors, pumps, and diesel engines sector or the broader market. Monitoring the company’s quarterly results and any strategic initiatives will be crucial to reassessing its outlook in the future.
Just made the cut! This Mid Cap from the Heavy Electrical Equipment sector entered our elite Top 1% list recently. Discover it before the crowd catches on!
- - Top-rated across platform
- - Strong price momentum
- - Near-term growth potential
Sector and Market Context
Kirloskar Brothers Ltd operates within the compressors, pumps, and diesel engines sector, a segment that is sensitive to industrial demand cycles and infrastructure spending. The company’s smallcap status means it is more vulnerable to market fluctuations and sector-specific risks compared to larger peers.
Given the current macroeconomic environment and sector dynamics, investors should carefully evaluate the company’s ability to capitalise on growth opportunities. The flat financial trend and below-average quality grade suggest that Kirloskar Brothers Ltd may face challenges in capturing market share or improving margins in the near term.
Stock Returns and Volatility
As of 22 February 2026, Kirloskar Brothers Ltd’s stock returns present a mixed picture. While the one-month return is a positive 8.14%, this is offset by declines over longer periods: -8.11% over three months, -18.89% over six months, and -11.37% over the past year. Year-to-date, the stock has declined by 0.84%, reflecting subdued investor enthusiasm.
This volatility underscores the importance of a cautious approach, particularly for risk-averse investors or those seeking stable income and growth. The stock’s underperformance relative to the BSE500 index’s 11.96% gain over the past year further emphasises the need for careful stock selection within this sector.
Conclusion
Kirloskar Brothers Ltd’s current 'Sell' rating by MarketsMOJO is grounded in a comprehensive analysis of its quality, valuation, financial trend, and technical outlook. The company’s below-average quality, flat financial performance, and fair valuation, combined with only mild technical support, suggest limited upside potential at this time.
Investors should consider these factors carefully and monitor upcoming quarterly results and sector developments before making investment decisions. While the stock may offer short-term trading opportunities, the overall recommendation advises caution and a prudent approach to exposure in Kirloskar Brothers Ltd.
Limited Period Only. Start at Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Get 71% Off →
