The shares of Indian automotive manufacturers gained up to 8 percent after the company’s strategic aims ambitious revenue target of Rs 1,000 crore by 2029.
With a market capitalization of Rs 421.07 crore, the shares of Kinetic Engineering Limited were trading at Rs 190.00 per share, increasing around 4.25 percent as compared to the previous closing price of Rs 182.25 apiece.
Reason for rise
The shares of the company have seen positive movement after Kinetic Engineering Ltd. (KEL) plans to issue Rs 177 crore in convertible warrants over 18 months, with promoters committing Rs 55 crore by March 2025, including 25% for future investments, pending SEBI and shareholder approvals. External investors have subscribed Rs 17.10 crore, including Transaction Square LLP and Sai Geeta Penumetsa.
Moreover, the phased investment includes Rs 60 crore by March 2025, Rs 44 crore by March 2026, and Rs 73 crore by March 2027. This initiative supports KEL’s Rs 1,000 crore revenue target by 2029, up from Rs 150 crore, while raising promoters’ stake from 59% to 70%.
However, since 2017, KEL’s promoters, led by founder Arun Firodia and family trusts, increased their stake from 49% to 70%, investing via Rs 93.5 lakh shares to reach 2.26 crore shares by July 2027. Funds will boost working capital, manufacturing, and EV component innovation.
Financial performance
Examine the company’s financial condition, revenue dipped by 4 percent from Rs 37.00 crore in Q2FY24 to Rs 35.47 crore in Q2FY25, and during the same time frame, net profit jumped by 13 percent from Rs 1.92 crore to Rs 2.17 crore.
Product portfolio
The company specializes in transmission components (gear shafts, gearboxes, and engines), small engines (up to 400 cc), and essential engine parts (cylinder heads, crankshafts, axles, camshafts). It also supplies spline yokes, body components (chassis, rims, mufflers), and products for mopeds, motorcycles, ATVs, and lawnmowers.
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Ratio analysis
The company’s critical ratios show that the return on equity decreased from 34.12 percent in FY22-23 to 12.69 percent in FY23-24, while the return on capital employed decreased from 14.48 percent to 10.37 percent. The net profit margin (NPM) for fiscal year 23-24 is 3.47 percent.
Shareholding pattern
In the company’s recent shareholding pattern, the Promoters of the company own 59.35 percent while Retail shareholders own a 33.52 percent stake in the company, and Foreign Institutional Investors own a 7.12 percent stake.
Company Profile
Kinetic Engineering Limited (Kinetic) manufactures high-technology components and assemblies with a focus on Power Train Components and assemblies. The Company manufactures components and assemblies for passenger vehicles, commercial vehicles, tractors, two-three wheelers, and construction vehicles, in addition to non-auto segments.
Written by Abhishek Singh
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