KSB Ltd received a rating upgrade to Accumulate from Hold, though target was cut to ₹868, as analysts see limited downside and an operational recovery from Q3.
KSB Ltd received a rating upgrade to Accumulate from Hold, with the target price cut to ₹868 from ₹940, as analysts at a domestic brokerage said downside looks limited and an operational recovery is expected from the third quarter of CY2026. The brokerage's note, released after the company's second-quarter results, said the earnings miss was driven by weakness in the valves segment amid supply-chain disruptions and elevated costs, while nuclear revenue conversion was constrained by delays in PCP testing. Pumps, however, remained resilient. Revenue rose 3.6% year on year, while EBITDA and PAT fell 10.7% and 18.8% respectively. The analysts projected an 11% revenue CAGR, 10.6% EBITDA CAGR, and 9.8% PAT CAGR over CY2025-28. Energy is expected to lead growth over the next two to three years, driven by thermal additions and nuclear ordering. The nuclear backlog stands at ₹12.3bn, and successful PCP testing remains the key near-term monitorable, the note said. Exports and operating leverage offer further upside. The brokerage valued KSB at 45x Jun-28E EPS, unchanged from its previous multiple. It expects H2CY2026 to mark an operational inflection point. Risks cited include delays at NPCIL, Middle East-related disruptions, weak domestic capex, and elevated working capital. The stock last traded at ₹807, about 7% below the revised target price.
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