Kennametal India Ltd

Overview

• Standalone BRSR for Kennametal India Limited for FY2025-26.
• Main activities: manufacturing and trading hard metal products; 90% turnover; machinery 10%.
• Reporting boundary is standalone; no subsidiaries.
• Locations: 1 plant and 5 offices in India; 6 sites total.
• Exports ~14% of turnover; serves 28 Indian states and 18 countries.

Key ESG Risks & Opportunities

• Energy transition offers cost and emissions benefits; 77% of energy from solar.
• Grid outages risk; mitigations through green energy transition and PPAs.
• FY30 target: >90% energy from solar; strong green energy program.
• OHS risk intrinsic to engineering; LTIFR zero for employees; 2 worker injuries.
• Mitigations: HIRA, JSA, work permits, Stop Work authority; safety campaigns.
• Product safety/quality risk; 24-hour initial response; 15-day resolution via Quality Clinic.
• Employee wellbeing program; 0.88% of revenue spent on wellbeing.
• Diversity & equal opportunity: >15% permanent female staff; 28.6% board female; 33.3% KMP female.
• Ethics/compliance risk; strong code; whistleblower policy; no penalties reported.
• Data security: policies in place; no external assurance reported.
• Related-party transactions: purchases from related parties 41%; sales to related parties 14%.

Governance & Policy Highlights

• ESG Committee of five Directors oversees BR policies; MD leads BR implementation.
• Anti-corruption/anti-bribery policy in place; policy link provided.
• BR policies cover Principles 1–9; board reviews BR practices semi-annually.
• No external assurance disclosed for BRRS.
• Investor complaint: one filed in June 2025; resolved July 3, 2025.
• POSH complaints: one in FY2025-26; internal committees and grievance processes in place.

Social Responsibility & Workforce

• Total employees/workers: 513; permanent 459; workers 513; male 91%, female 9%.
• Board female representation: 28.6%; Key Management: 33.3% female.
• Turnover: permanent employees 17.86%; permanent workers 4.46%.
• Differently abled workers: 2; all among workers.
• Health & safety training: 88.9% of employees; 96.7% of workers.
• Well-being spending: 0.88% of revenue.
• PF and gratuity 100% coverage; ESI coverage varies: permanent 0%, workers ~29%.
• Grievance mechanism with 30-day resolution; email contact provided.
• Permanent workers unionisation approx. 94%; parental leave return-to-work 26 days; retention 100%.

Environmental Performance

• Total energy use: 75,797 GJ; renewables 58,464 GJ; non-renewables 17,333 GJ.
• 77% of energy sourced from solar; energy intensity 5.02 GJ per million INR.
• Total emissions: Scope 1 1,583 tCO2e; Scope 2 3,024 tCO2; total 4,607 tCO2e.
• Emissions intensity: 0.30 tCO2/million INR; PPP-adjusted intensity 0.30.
• Water withdrawal: 46,982 KL; water intensity 3.11 KL/million INR.
• Waste generated: 737.85 tonnes; 458.65 recycled; 232.25 reused; 46.93 other recovery.
• Zero liquid discharge; wastewater reused for gardening within plant.
• Certifications: ISO 45001, ISO 14001, ISO 9001; EPR compliance with credits.

Stakeholder Engagement & Complaints

• Key groups: investors, shareholders, customers, employees, regulators, suppliers, communities.
• Engagement channels: emails, AGM, press releases, website; frequency varies.
• Investor complaint: 1 filed in 2025; resolved; periodical updates maintained.
• Customer base: 656 clients; 39 complaints in FY2025-26; resolution tracked.
• Employees/Workers: 7 health/safety complaints in FY2025-26; 0 pending.
• POSH complaints: 1 in FY2025-26; compliant grievance handling.

Other Notable Metrics

• Related party transactions: purchases from related parties 41%; sales to related parties 14%.
• RPT concentration with top dealers and suppliers captured in disclosures.
• Direct MSME supplier share: 15%; direct Indian suppliers 36%.
• R&D: minimal at local level; leverages Kennametal Inc. R&D capabilities.
• Data privacy: no data breaches reported; IT security framework aligned with NIST.

Financial performance

• Total revenue from operations: INR 15,107 million; up ~29% YoY.
• Profit before tax: INR 2,663 million; up 89.9% YoY.
• Profit after tax: INR 1,960 million.
• Earnings per share: INR 89.18 (basic/diluted).
• ROCE: 31%; Net debt-to-equity: 0.22x.

Operations and segments

• Hard Metal revenue: INR 13,636 million; MSG revenue: INR 1,471 million.
• Hard Metal segment PBT: INR 3,161 million; MSG: INR -123 million.
• No single customer accounts for >10% of revenue.
• Capex planned for new MSG facility: INR 680 million.

Capital structure and dividends

• Interim dividend: INR 40 per share; treated as final for FY26.
• Equity capital: INR 219.78 million; 21,978,240 shares issued.
• Net debt-to-equity ratio: 0.22x.

Governance and risk

• Board of 7: 3 independent; 1 woman; MD; 3 non-exec incl. 1 woman.
• No changes in board or KMPs during FY25-26.
• Statutory auditor: Price Waterhouse; Internal: Ernst & Young; 2026-27 internal: KPMG.
• Related party transactions approved; arm's length; overseen by Audit Committee.

ESG and CSR

• Energy from solar: 77.1%; energy intensity: 5.02 GJ/million INR.
• Water intensity: 3.11 KL/million INR; total water withdrawal: 46,982 KL.
• Waste: total 737.85 MT; recycled 458.65 MT; reused 232.25 MT; recovered 46.93 MT.
• CSR spend: INR 27 million; lake restoration and STEM education initiatives.

Outlook and risks

• India FY27 GDP growth projected ~7%; domestic demand supports growth.
• Geopolitical risks and energy price volatility present near-term headwinds.
• Strategy focuses on expanding Hard Metal and MSG footprints; localization.

AGM and communications

• 61st AGM on 13 Nov 2026; e-voting 10-12 Nov 2026.
• Interim dividend paid 1 Jun 2026; treated as final for FY26.
• Annual report and AGM notices available online; hard copies on request.

Kennametal India Limited trading window closed from September 16, 2026 until completion of 48 hours after the declaration of unaudited financial results for the first quarter ending September 30, 2026.

Meeting Details

• Date: September 7, 2026; time not disclosed.
• Type: group meeting with Institutional Investors / Analysts; mode not disclosed.
• Organiser: Kennametal India Limited.
• Recording: video of the meeting available on company website; no presentation.

Meeting Details

• Sept 7, 2026, 3:30 PM; virtual one-to-one/group investor meeting with company management (Kennametal India).

Cost Auditor Re-appointment

• Re-appointed M/s. K.S. Kamalakara & Co. as Cost Auditors for FY 2026-27.

Senior Management Appointment

• Mr. Vigneshkumar V, DGM-EHS, appointed as SMP, effective Aug 13, 2026; 22 years EHS leadership.

Q4 FY26 results

• Revenue in Q4 FY26 rose 47.68% YoY to ₹4,776 Mn.
• PBT increased to ₹1,184 Mn from ₹413 Mn YoY.
• Growth driven by broad-based demand across end-use segments; Hard Metal volume growth supported.
• Outlook: management expects continued momentum and opportunities for profitable growth.

Financial results approved

• Audited FY26 Q4 and full-year AFR approved; auditor's report unmodified.

Key financial highlights

• Q4 revenue ₹4,776 mn; Q4 PBT ₹1,184 mn.
• FY26 year revenue ₹15,107 mn; net profit ₹1,960 mn.

Governance and appointments

• Re-appointed cost auditors: M/s. K.S. Kamalakara & Co. for 2026-27.
• Appointed Mr. Vigneshkumar V as SMP (EHS) effective Aug 13, 2026.

Shareholder communication and AGM

• 61st AGM notice approved for Nov 13, 2026.
• Press release on results enclosed and to be issued.

Regulatory/Accounting impact

• Labour Code changes increase gratuity liability by ₹52 mn; recognized in employee benefits.

Demat processing and owner update

• Securities received for dematerialisation were confirmed to depositories by the RTA.
• The dematerialised securities were listed on the stock exchanges where earlier issues are listed.
• Certificates dematerialised were mutilated and cancelled after verification; depository name updated as registered owner within prescribed timeline.