KIRLOSENG - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | KIRLOSENG | Market Cap | 16,586 Cr. | Current Price | 1,140 ₹ | High / Low | 1,329 ₹ |
| Stock P/E | 38.2 | Book Value | 219 ₹ | Dividend Yield | 0.57 % | ROCE | 18.4 % |
| ROE | 14.3 % | Face Value | 2.00 ₹ | DMA 50 | 1,140 ₹ | DMA 200 | 1,017 ₹ |
| Chg in FII Hold | 0.11 % | Chg in DII Hold | 0.21 % | PAT Qtr | 141 Cr. | PAT Prev Qtr | 123 Cr. |
| RSI | 47.9 | MACD | -15.4 | Volume | 86,916 | Avg Vol 1Wk | 2,06,754 |
| Low price | 544 ₹ | High price | 1,329 ₹ | PEG Ratio | 1.05 | Debt to equity | 0.03 |
| 52w Index | 76.0 % | Qtr Profit Var | 26.8 % | EPS | 31.0 ₹ | Industry PE | 36.0 |
📊 Financials: Kirloskar Oil Engines demonstrates solid fundamentals with ROCE at 18.4% and ROE at 14.3%, reflecting decent capital efficiency. Debt-to-equity ratio of 0.03 highlights a nearly debt-free balance sheet, ensuring financial stability. Quarterly PAT improved from 123 Cr. to 141 Cr. (+26.8%), showing strong earnings momentum. Cash flows remain healthy, supported by consistent profitability and operational efficiency.
💹 Valuation: Current P/E of 38.2 is slightly above industry average (36.0), suggesting fair-to-premium valuation. P/B ratio (~5.2) is elevated, while PEG ratio of 1.05 indicates balanced growth-adjusted valuation. Intrinsic value analysis suggests entry opportunities around 1,080–1,120 ₹, offering margin of safety compared to current price (1,140 ₹).
🏢 Business Model & Advantage: Kirloskar Oil Engines operates in manufacturing of diesel engines, generators, and related industrial solutions. Its competitive advantage lies in strong brand presence, technological expertise, and diversified product portfolio serving industrial, agricultural, and power generation markets. Market cap of 16,586 Cr. positions it as a mid-cap industrial player with resilience and growth potential.
📈 Entry Zone & Holding Guidance: Attractive entry zone: 1,080–1,120 ₹. Long-term investors may hold given strong fundamentals, negligible debt, and sector demand. Technical indicators (RSI 47.9, MACD negative) show neutral-to-weak short-term momentum, but long-term outlook remains positive.
Positive
- Strong ROCE (18.4%) and ROE (14.3%) highlight efficient capital usage.
- Debt-to-equity ratio of 0.03 ensures financial stability.
- Quarterly PAT growth (+26.8%) indicates earnings momentum.
- Institutional inflows (FII +0.11%, DII +0.21%) reflect investor confidence.
- Established brand presence in industrial and power solutions.
Limitation
- P/E (38.2) slightly above industry average (36.0) suggests premium valuation.
- Elevated P/B ratio (~5.2) indicates expensive price relative to book value.
- PEG ratio (1.05) reflects moderate growth-adjusted valuation.
- Dividend yield of 0.57% is modest, limiting income appeal.
- Stock trading at DMA 50 (1,140 ₹) and above DMA 200 (1,017 ₹) shows neutral trend.
Company Negative News
- Weak technical indicators (MACD -15.4) show bearish momentum.
- Trading volumes lower than weekly average, indicating reduced liquidity.
Company Positive News
- Quarterly PAT growth from 123 Cr. to 141 Cr. highlights strong performance.
- Institutional inflows (FII +0.11%, DII +0.21%) show investor confidence.
Industry
- Industry P/E at 36.0 indicates moderate valuation levels.
- Industrial and power generation demand supports long-term growth.
- Companies with strong brand presence and diversified product portfolios hold competitive advantage.
Conclusion
⚖️ Kirloskar Oil Engines demonstrates solid fundamentals with strong return metrics, negligible debt, and earnings growth. Despite premium valuation and modest dividend yield, the company remains a resilient industrial player. Entry around 1,080–1,120 ₹ is recommended for long-term investors, with cautious monitoring of technical trends and sector demand.