Buy Kirloskar Oil Engines, target price Rs 1,540 : Motilal Oswal Financial Services

Motilal Oswal Financial Services has a buy call on Kirloskar Oil Engines with a target price of Rs 1,540. The current market price of Kirloskar Oil Engines Ltd. is Rs 1,111.95 . Kirloskar Oil Engines Ltd., incorporated in 2009, is a Small Cap company with a market cap of Rs 16248.36 crore, operating in Engineering sector.

Kirloskar Oil Engines' key products/revenue segments include Engine & Gensets, Sale of services, Scrap, Export Incentives, Solar Power, Other Operating Revenue, Commission for the year ending 31-Mar-2024.

Financials

For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 1516.06 crore, down -7.97 % from last quarter Total Income of Rs 1647.44 crore and up 15.49% from last year same quarter Total Income of Rs 1312.67 crore. The company has reported net profit after tax of Rs 124.88 crore in the latest quarter.

The company's top management includes Mr.Atul C Kirloskar, Mr.Yogesh Kapur, Dr.Shalini Sarin, Mr.Kandathil Mathew Abraham, Mr.Satish Jamdar, Mr.Arvind Goel, Mr.Mahesh R Chhabria, Mr.Vinesh Kumar Jairath, Mr.Rahul C Kirloskar, Ms.Gauri Kirloskar, Mr.Purvi Sheth. Company has G D Apte & Co. as its auditors. As on 30-09-2024, the company has a total of 15 Crore shares outstanding.

Investment Rationale
The Kirloskar Oil Engines stock is currently trading at 34x/26x/20x FY25E/26E/27E earnings. Adjusted with subsidiary valuation, KOEL is trading at 31x/23x/18x FY25E/26E/27E EPS, which is still at a 45-50% discount to the market leader. Motilal Oswal Financial Services continues to reiterate a BUY on KOEL as they expect it to benefit from improved sales from higher HP segments, exports, and improving trajectory of the B2C segment.

Promoter/FII Holdings
Promoters held 41.17 per cent stake in the company as of 30-Sep-2024, while FIIs owned 10.79 per cent, DIIs 24.52 per cent.