KIRLOSENG - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.0

Here’s a comprehensive analysis of Kirloskar Oil Engines Ltd (KIRLOSENG)

📊 Core Financials

Profitability

EPS of ₹33.7 is solid, backed by strong ROE (14.9%) and ROCE (13.7%) — respectable efficiency metrics.

PAT rose from ₹67.9 Cr to ₹112 Cr — a strong sequential jump, though the quarterly profit variation shows a YoY decline of -17.3%, hinting at volatility.

Debt & Liquidity

Debt-to-equity ratio of 1.89 — relatively high, which could pressure margins and cash flows.

Dividend yield of 0.71% — modest but consistent.

📈 Valuation Metrics

Metric Value Remarks

P/E Ratio 31.1 Below industry average (41.8) — fair valuation

P/B Ratio ~4.3 Based on Book Value ₹213 — reasonable

PEG Ratio 0.82 Attractive — growth justifies valuation

Intrinsic Value ₹750–₹800 (est.) Current price slightly above fair value zone

🧠 Business Model & Competitive Edge

Model: Manufacturer of internal combustion engines, gensets, and agricultural equipment.

Strengths

Legacy brand with diversified industrial applications

Strong presence in power generation and farm mechanization

Challenges

High debt levels may limit expansion flexibility

Competitive pressure from domestic and global players

📉 Technical & Sentiment Indicators

RSI at 56.8 — neutral zone, no strong momentum

MACD positive at 16.1 — bullish crossover

DMA50 and DMA200 below current price — trend is upward

FII holding down (-0.67%), DII holding up (+0.62%) — mixed institutional sentiment

🎯 Entry Zone & Long-Term View

Suggested Entry Zone: ₹880–₹910 — near DMA levels and technical support

Stop Loss: ₹845 (daily close)

Targets: ₹980 short-term, ₹1,050 medium-term

Long-Term Holding: Suitable for moderate-risk investors. Strong fundamentals and brand legacy make it a viable 3–5 year compounder if debt is managed and margins improve.

Want to compare it with Cummins or Greaves Cotton to see how it stacks up in the engine manufacturing space? I’ve got that ready.

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