The shares of the engine manufacturing company surged around 6 percent after investing USD 2.5 million in its wholly-owned subsidiary. The shares have delivered more than 80 percent returns to shareholders on a YTD basis.
With a market capitalization of Rs. 8,147 crores, the shares of Kirloskar Oil Engines Ltd started Thursday’s trading session on a flatter note at Rs. 562. The shares hit a high of Rs. 594.70 making a gain of around 6 percent which is also recorded as the company’s fresh 52-week high, and closed at Rs. 597.65 apiece.
Such a bullish movement was observed after the company in an exchange filing announced that they had invested USD 2.5 million in Optionally Convertible Redeemable Non‐Cumulative Preference Shares of Kirloskar Americas Corporation which is wholly owned by the company.
Furthermore, on 29 November 2023, Kirloskar Americas Corporation acquired a 51 percent stake in Engines LPG which is based out of the USA at a consideration of USD 3.57 lakh by signing a Securities Purchase Agreement and other ancillary agreements as per prevailing application laws in the USA.
The purpose of the acquisition is to expand their business and enable market development in Powergen applications for the North American markets.
Coming onto the financial statements, the company’s revenue decreased by 15 percent from Rs. 1,543 crores during Q1 FY24 to Rs. 1,304 crores in Q2 FY24. In addition, the net profit declined by 38 percent from Rs. 125.53 crores to Rs. 77.97 crores during the same timeframe.
Looking at the important financial ratios, the return on equity(RoE) increased from 8.58 percent during FY21-22 to 15.21 percent in FY22-23. Moreover, the return on capital employed(RoCE) improved from 9.94 percent to 13.77 percent during the same period.
According to the latest shareholding pattern, the Promoters have a 41.23 percent stake, the Retail Investors have 26.69 percent shares, DIIs have a considerable stake of 24.29 percent, and the remaining 7.79 percent shares are with FIIs.
Headquartered in Pune, Kirloskar Oil Engines Ltd was incorporated in 2009. The company manufactures air-cooled and liquid-cooled diesel engines and generator sets, offering a wide range of power output and they have expertise in manufacturing a variety of agri-engines and diesel engine pumps.
Written By Vaibhav Patil
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