Kennametal Inc (KMT)

Profitability ratios

Return on sales

Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020
Gross profit margin 30.41% 31.14% 30.39% 29.93% 30.36% 30.60% 31.15% 31.28% 31.11% 31.12% 31.32% 31.98% 32.20% 32.73% 32.45% 31.60% 30.00% 28.06% 28.48% 28.04%
Operating profit margin 7.28% 8.77% 8.52% 8.31% 8.71% 8.34% 8.77% 9.11% 9.26% 9.68% 9.83% 10.48% 10.84% 10.82% 10.27% 9.04% 5.55% 3.34% 3.25% -0.64%
Pretax margin 6.71% 7.87% 7.02% 6.75% 7.06% 6.64% 7.31% 7.57% 7.68% 8.35% 8.83% 9.68% 10.27% 10.00% 8.61% 7.28% 3.51% 1.29% 1.94% -1.86%
Net profit margin 4.73% 5.45% 4.76% 4.98% 5.34% 5.29% 5.86% 5.80% 5.70% 6.01% 6.25% 6.75% 7.19% 6.91% 6.31% 5.84% 2.96% 0.60% -0.50% -1.91%

The analysis of Kennametal Inc.'s profitability ratios over the specified periods reveals several notable trends and insights.

Gross Profit Margin:
The gross profit margin demonstrates a steady upward trajectory from approximately 28.04% at the end of September 2020 to a peak of about 32.73% in March 2022. This increase suggests improvements in cost management, pricing strategies, or product mix that positively impacted gross profitability. Following this peak, the margin experiences slight fluctuations but remains relatively stable, hovering around 31% to 31.5% through the subsequent periods. The margins show a marginal decline post-March 2022 but maintain a relatively consistent level, indicating sustained efficiency in managing direct costs relative to revenue.

Operating Profit Margin:
Kennametal’s operating profit margin starts below zero at -0.64% at the end of September 2020, reflecting operational challenges or restructuring effects during that period. Subsequently, the margin shows a significant recovery, reaching above 9% by September 2021 and maintaining a period of stability around the 8–10% range until early 2024. This indicates successful improvements in operating efficiency and cost controls. However, from March 2023 onward, there is a gradual decline, with the margin decreasing to approximately 7.28% by June 2025. Nonetheless, the operating margin remains positive, implying ongoing operational profitability despite the downward trend.

Pre-Tax Margin:
Pre-tax margins follow a similar improvement trajectory from negative territory (-1.86%) in September 2020 to as high as 10.27% in June 2022. The peak period indicates enhanced profitability before taxes, likely driven by operational efficiencies or favorable market conditions. After reaching this peak, the margin declines gradually but stays consistently above 6.7%, ending at around 6.71% in June 2025. The sustained positive pre-tax margins reflect improved earnings before tax expenses, though the decreasing trend suggests moderate pressure on pre-tax profitability over time.

Net Profit Margin:
The net profit margin exhibits a recovery from negative figures (-1.91%) at the end of September 2020 to a high of 7.19% in June 2022. During this period, net income improved considerably relative to revenue, pointing toward effective expense management and operational improvements. After June 2022, a gradual decline is observed, with the margin stabilizing around 4.73% to 5.86% in the most recent periods. The consistent positive net profit margins indicate ongoing profitability at the bottom line, although the decreasing trend reflects increased costs, competitive pressures, or other factors impacting net income relative to sales.

Overall:
Kennametal Inc. experienced a significant turnaround from operating losses to sustained profitability between 2020 and 2022, driven primarily by improvements in gross and operating margins. While the gross profit margin remained relatively stable once established, the operating, pre-tax, and net margins peaked around mid-2022 and have since experienced modest declines. This suggests that the company has become more efficient and profitable but faces challenges in maintaining the higher margins achieved during the peak years. The consistency of positive margins in recent periods indicates resilience, but the downward trend warrants ongoing monitoring of cost control measures and revenue strategies to sustain profitability margins over the longer term.


Return on investment

Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020
Operating return on assets (Operating ROA) 5.62% 7.02% 7.08% 6.71% 7.12% 6.80% 7.15% 7.52% 7.55% 7.65% 7.76% 8.43% 8.48% 8.13% 7.75% 6.67% 3.83% 2.18% 2.12% -0.44%
Return on assets (ROA) 3.66% 4.37% 3.95% 4.02% 4.37% 4.31% 4.78% 4.79% 4.65% 4.75% 4.93% 5.43% 5.62% 5.19% 4.76% 4.31% 2.04% 0.39% -0.32% -1.32%
Return on total capital 12.22% 14.74% 14.36% 13.47% 14.66% 14.58% 15.03% 15.71% 15.55% 15.97% 17.04% 18.93% 19.02% 18.01% 16.92% 17.27% 13.71% 14.03% 17.34% 12.16%
Return on equity (ROE) 7.25% 8.79% 7.89% 7.94% 8.75% 8.59% 9.44% 9.55% 9.29% 9.70% 10.17% 11.37% 11.55% 10.45% 9.45% 8.48% 4.09% 0.80% -0.66% -2.76%

The profitability ratios of Kennametal Inc. from September 2020 through June 2025 demonstrate notable variations, reflecting evolving operational efficiency and financial performance over this period.

Operating Return on Assets (Operating ROA):
Initially, the Operating ROA exhibited a significant decline in September 2020, registering at -0.44%. This suggests the company was operating at a loss relative to its assets during that quarter. Subsequently, there was a marked improvement, with the ratio ascending to positive territory by December 2020 at 2.12%. The upward trend continued through 2021 and into 2022, peaking at approximately 8.48% in June 2022, indicating enhanced operational efficiency and profitability at the asset level. From mid-2022 onward, the ratio demonstrated a gradual decline, flitting around the 7% to 8% range, with a slight dip to 6.80% in March 2024, and fluctuating in subsequent quarters at approximately 6.71% to 7.15%. This trend suggests a stabilization in operating profitability, although at somewhat lower levels than its peak in mid-2022.

Return on Assets (ROA):
Similar to operating ROA, the general ROA trend indicates recovery from negative values in September 2020 (-1.32%) to positive figures by March 2021. The ratio reached approximately 5.62% by June 2022, before gradually declining back to around 4%–4.8% in late 2023 and into 2024. The decline from the peak indicates reduced overall efficiency in generating net income from assets, but the ratios remain positive, reflecting sustained profitability.

Return on Total Capital:
This ratio exhibits a more volatile but overall high and positive trend, starting at 12.16% in September 2020 and climbing to a peak of around 19% in June 2022. Afterward, the ratio decreases slightly to between approximately 13.47% and 15.71% through 2023, and then gradually down to about 12.22% by June 2025. These figures indicate that Kennametal has managed to generate positive returns on its total capital, though recent periods show some contraction, possibly reflecting changes in capital structure or profitability pressures.

Return on Equity (ROE):
ROE showed a significant recovery from negative values in September 2020 (-2.76%) to positives by March 2021, with notable growth reaching approximately 11.55% in June 2022. Following the peak, the ROE experienced a declining trend, settling around 7.25% in June 2025. The fluctuations imply that while the company’s net income relative to shareholders’ equity improved markedly in 2021 and 2022, recent periods show a moderation possibly due to lower net income margins or changes in leverage.

Overall Assessment:
The data reveals an initial period of losses in late 2020, followed by a strong recovery in profitability metrics through 2021 and into mid-2022. The peak profitability occurred around that time, particularly evident in Operating ROA and ROE. Since mid-2022, profitability ratios have generally moderated, indicating pressures or operational stabilization. The ratios remain positive across all measures, reflecting consistent profitability, though the decreasing trend in ratios after mid-2022 suggests a possible decline in efficiency or margin compression.

In summary, Kennametal Inc. experienced a robust rebound in profitability from late 2020 through mid-2022, with subsequent moderate declines. The ratios highlight an improving but somewhat easing profitability landscape over the last fiscal years.