Broker's call

| Updated on January 16, 2018 Published on October 07, 2016


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.

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Published on October 07, 2016
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