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Motilal Oswal Report
Kirloskar Oil Engines Ltd.'s results were ahead of our estimates with the company reporting a YoY growth of 21%/80%/81% in revenue/Ebitda/profit after tax for the quarter. For the full year FY24, revenue/Ebitda/PAT grew 18%/32%/34% YoY and export revenue crossed the Rs 5 billion mark. The B2B segment revenue growth for the year was aided by industrial, distribution, and export sectors.
The B2C segment growth was driven by water management system. We expect Kirloskar Oil Engines also to continue to benefit from strong demand across segments.
We revise our estimates upwards by 6% to factor in improving trends in powergen, exports, and distribution. Consequently, we revise our SOTP-based target price to Rs 1,220, valuing core business at 25 times Mar'26E earnings.
Kirloskar Oil Engines continues to be re-rated due to its consistent delivery on key parameters of improved product mix, increased penetration of HHP (sold 17 models of Opti-prime gensets) as well as a higher share of exports (at 10.8% of sales). We maintain our Buy rating on the stock.
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