Kirloskar Oil Engines (KIRLOSENG) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 marked the first quarter post full transition to CPCB IV+ emission norms, with steady performance and strong domestic demand, especially in infrastructure and construction sectors.

• Standalone and consolidated unaudited financial results for the quarter and half year ended 30th September 2024 were approved and released.

• Achieved 9.3% year-over-year top-line growth in H1 FY25, with revenue reaching ₹2,518 crore and EBITDA margin at 12.7%.

• The 2X-3Y strategy aims to double revenue in three years, targeting ₹65 billion with double-digit EBITDA margins.

• Consolidation of five manufacturing units into a new Sanand facility was completed, expected to drive cost efficiencies and growth.

Financial highlights

• Standalone Q2 FY25 revenue from operations: ₹1,194.35 crore; total income: ₹1,206.10 crore.

• Standalone Q2 FY25 net profit: ₹110.27 crore; H1 FY25 net profit: ₹244.20 crore.

• Consolidated Q2 FY25 revenue: ₹1,500.32 crore; consolidated Q2 FY25 net profit: ₹123.89 crore; H1 FY25 net profit: ₹279.46 crore.

• Standalone EBITDA: ₹148 crore (12% margin), up 35% year-on-year; reported margin including one-time recovery at 14%.

• Standalone net cash position at ₹213 crore as of Q2 FY25.

Outlook and guidance

• Management remains committed to achieving aspirational revenue targets, with teams motivated and growth momentum maintained over the past two years.

• Long-term ambition to reach $2 billion consolidated revenue in five years, focusing on manufacturing, technology, and international expansion.

• Market dynamics in Powergen and B2B segments will be closely monitored as more players enter the CPCB IV+ market.

• Export growth expected to improve in H2, despite challenges in key markets like South Africa.

• Board and audit committee have reviewed and approved the results, with no adverse auditor remarks.