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Hidden Gem KSB Ltd - Nuclear Energy - Long cycle tailwinds

ICICIdirect Research 29 Aug 2025 DISCLAIMER

With the ambitious target of 100GW of nuclear capacity by 2047, nuclear power is poised to be a cornerstone in the country's clean energy transition. 
India’s nuclear power capacity is set to grow from 8.2 GW to 22.5 GW by 2031-32. India's nuclear energy sector presents numerous opportunities for investment and growth. The government's plans for expanding nuclear energy include collaborations with private players for the development of Bharat Small Reactors (BSR) and Bharat Small Modular Reactors (BSMR).  
The nuclear energy market currently boasts 23 reactors with a combined capacity of 7.48 GW, and there are 12 reactors under construction, eight reactors with 9.4 GW capacity have received financial sanction, and 18 reactors with 24 GW capacity have been accorded in-principal approval. This robust pipeline amounts to a cumulative capacity of 46.48 GW, establishing India as a prospective big nuclear market for investment thereby creating robust awarding opportunities for companies providing equipment in construction of nuclear power plant
KSB ltd will be one of the biggest beneficiaries of the tailwinds of nuclear opportunity as it is the only approved vendor for primary coolant pumps and boasts full suite of pump product portfolio ranging from: main coolant, safety injection, emergency cooling, feed water, condensate, and custom applications. Access to global KSB technology for all nuclear reactor types (PWR, BWR, SMR), subject to regulatory approval.
The current order book for the nuclear stands at Rs 1316 crore wherein it has booked orders from Kaiga Unit 5&6, light water reactor order at kundakulum and also successfully bagged one export order from Europe. Ordering pipeline going ahead, includes 8 reactors (6.6GW) under construction with 10 more reactor sanctioned. As per the management, the total addressable market for nuclear pumps Rs 3500 crore out of which Rs 2000 crore from primary coolant pumps and Rs 1500 from ex- primary coolant pumps.  
Apart from the base business of engineered, standard and solar pumps is also gaining good traction in order flows wherein the order backlog as of H1CY25 stands at Rs 1300 crore.
Going ahead, with pick up in execution of nuclear orders and other segment, the revenue is expected to grow at a CAGR of 16% over CY24-CY26E whereas PAT is expected to grow at a CAGR of 21% over the same period.
We value the company at 45x CY26E and assign fair value of Rs 965

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