Kirloskar Oil

Kirloskar Oil Engines achieved a record-breaking Q1 FY26, with standalone net sales reaching ₹1,434 crores, an 8% YoY increase, and consolidated net sales at ₹1,751 crores, also up 8% YoY. Standalone EBITDA grew 9% YoY to ₹190 crores, maintaining a healthy margin of 13.2%. Consolidated net profit from continuing operations saw a modest 1% YoY increase to ₹134 crores, reflecting a strong start to the fiscal year.

The power generation business demonstrated a strong revival, recording its highest ever Q1 sales at ₹609 crores, a 15% YoY increase. This growth was fueled by renewed demand and significant traction in the high horsepower (HHP) segment, where the company is rapidly gaining market share. New products like the Sentinel and Optiprime ranges have received positive customer acceptance, and all products up to 800 kilowatt are now CPCB IV+ compliant.

The industrial business reported sales of ₹310 crores, an 8% YoY decrease, primarily due to a pre-buy phase in railways in the previous year. However, the company is strategically focused on indigenization programs, progressing on projects for NPCIL and a 6-megawatt marine engine prototype development for the Indian Navy. These initiatives are deeply aligned with long-term ambitions and are expected to open up significant opportunities in the defence sector.

International B2B sales grew 13% YoY to ₹120 crores, driven by strong demand in the Middle East and North Africa regions following a successful business model change. The B2C segment, which now includes the reclassified farm mechanization business, saw sales of ₹172 crores, a 4% YoY increase, with international B2C growing robustly by 76% to ₹18 crores. The divestiture of the Optiqua tables and pipes business was completed, streamlining the portfolio to core strategic areas.

ARKA, the financial services arm, reported ₹196 crores in revenue, an 18% YoY growth, but its PBT declined 28% to ₹14 crores. The Asset Under Management (AUM) stood at ₹7,231 crores as of June 30, 2025, with Gross NPAs at 0.9% and Net NPAs at 0.3%, and Q1 ROAs at 0.7%. Management is executing a strategy to build a granular retail book, expanding its presence in 32 branches across Tier-2 and Tier-3 cities, aiming for improved returns on capital over time.

The complete transition to CPCB IV+ emission norms for products up to 800 kilowatt has made engine service proprietary, leading to consolidation in the aftermarket and distribution channels. This change has enhanced the company's service capabilities and coverage, leveraging a composite model of in-house and certified dealership engineers to meet customer expectations for the new electronic engines.