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JMFL
Kirloskar Oil (Buy)
CMP: ₹356
Target: ₹400
Kirloskar Oil Engines (KOEL) is one of India’s oldest engineering houses and largest diesel genset suppliers in India (30 per cent/23 per cent volume/ value market share).
Following a change in the top management team in FY13, including the MD, CFO and SBU Heads, KOEL has led several initiatives such as swifter product launches, stricter cost controls with higher R&D, geographical expansion and numerous techno-commercial tie-ups. With forecasted net profit CAGR of 24 per cent over FY16–19E, the company has a strong financial profile, including FCF yield of 6–7 per cent, RoICs of 25 per cent+ and robust cash position (16 per cent of market capitalisation).
Key risks are technology disruption, management attrition and prolonged stagnation in the real estate industry.
Business Line is not responsible for the recommendations sourced from third party brokerages. Reports may be sent to: blmarketwatch@gmail.com
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