Kirloskar Oil Engines Ltd. share price target

KOEL’s 2QFY25 results beat our estimates, with 13%/67%/90% YoY growth in revenue/EBITDA/PAT.

KOEL’s revenue at INR13.9b grew 21% YoY/23% QoQ, led by 28%/19%/70% YoY
growth in industrial/distribution/export sectors. Powergen segment growth
stood at 11% YoY

from 5kVA to 3,000kVA. The company is India's largest diesel genset supplier with a volume/value market share of 34%/23%. Company has well established market presence in the agriculture and industrial sectors and bulk of the revenue is derived from sales of diesel-powered farm pump sets (agriculture) and engines for...

Kirloskar Oil Engines (KOEL) reported a disappointing set of numbers for 3QFY2016. Its top-line for the quarter declined by 1.8% yoy to Rs601cr. Employee expense as a percentage of sales increased by 34bp yoy to 8.5%, and other expenses as a percentage of sales increased by 181bp yoy to 19.6% of sales. This resulted in the EBITDA margin contracting by 137bp yoy to 8.1%. There was an exceptional expense of Rs10.4cr during the quarter related to Voluntary Retirement Scheme (VRS) for employees. Adjusting for the VRS expense, the net profit declined by 14.9% yoy to Rs29cr. Outlook to remain subdued in the near term: In the near term, we expect the company to witness some pressure on account of overall slowdown in the Genset industry. In addition, the absence of NPCIL orders in large engines segment has been impacting the top-line and profitability. The company has guided that although the near term outlook remains muted, it is hopeful about the longer term prospects. KOEL has expanded its capacity in the past and is positioned to successfully cater to improvement in demand once the operating environment changes in the longer run. KOEL also has taken measures to increase its focus on...

For 2QFY2016, Kirloskar Oil Engines (KOEL) reported a disappointing set of numbers. Its top-line for the quarter declined by 6.0% yoy to Rs590cr. The raw material cost declined by 286bp yoy to 62.3% of sales while employee expense increased by 79bp yoy to 8.5% of sales, and other expenses increased by 405bp yoy to 21.0% of sales. This resulted in the EBITDA margin contracting by 198bp yoy to 8.2%. Other income increased by 61.1% yoy to Rs20cr and consequently, the net profit remained flat at Rs36cr. Outlook to remain subdued in the near term: In the near term, we expect the company to witness some pressure on account of overall slowdown in the Genset industry. In addition, the absence of large engines orders has been impacting the top-line and profitability. KOEL has expanded its capacity in the past and is positioned to successfully cater to improvement in demand once the operating environment changes in the longer run. KOEL also has taken measures to increase its focus on exports which should aid growth. Cash rich position: KOEL is a debt free company with cash and cash equivalents of approximately Rs835cr. With ample capacity in place, there is no major capex expected...