Company Update : Kirloskar Oil Engine Ltd by Motilal Oswal Financial Services Ltd
Strong results with a beat across all parameters
* 2QFY26 revenue at INR16.0b (+34% YoY) was above our estimate of INR14.4b. On consolidated basis, B2B segment revenue increased 34% YoY, while B2C revenue was up 23% YoY.
* EBITDA at INR2.1b was 15% ahead of our estimate of INR1.9b. EBITDA margin stood at 13.4%. 2QFY25 EBITDA included INR174m worth of provision reversals for overdue receivables made for a customer toward sales made in earlier years. Excluding the reversal, 2QFY25 EBITDA margin stood at 12.4%. Thus, 2QFY26 EBITDA grew 45% YoY, while EBITDA margin expanded 100bp YoY.
* On the segmental basis, B2B segment EBIT margin improved 30bp sequentially to 11.2%, while B2C EBIT margin stood at 7%.
* PAT at INR1.4b (+27 YoY) beat our estimate by 17%. Excluding the reversal of last year, PAT for last year stood at INR1.0b.
* For 1HFY26, revenue/EBITDA/PAT increased by 20%/12%/7% to INR30.5b/INR4.0b/INR2.6b.
* For 1HFY26, OCF jumped 149% to INR2.4b, while FCF stood at INR1b vs. an outflow of INR0.1b in 1HFY25.
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