Kirloskar Oil Engines (KIRLOSENG) Q2 25/26 earnings summary

Executive summary

• Achieved record quarterly and H1 net sales, with strong year-on-year and quarter-on-quarter growth in both standalone and consolidated results.

• Power Generation and Industrial segments led growth, with significant momentum in domestic and export markets.

• Strategic restructuring of B2C business (now Fluid Dynamics/Water Management Solutions) completed, transferring operations to a wholly owned subsidiary.

• International business, especially Middle East and North Africa, contributed significantly to export growth.

• ARCA financial services pivoted to retail lending, expanded branch network, and reduced borrowing costs.

Financial highlights

• Standalone Q2 FY26 net sales: ₹1,593 crore, up 35% year-on-year; net profit: ₹141 crore, up 44% year-on-year.

• Consolidated Q2 FY26 revenue: ₹1,948.38 crore, up 30% year-on-year; net profit: ₹159.19 crore, up 51% year-on-year.

• Standalone H1 FY26 net sales: ₹3,027 crore, up 20% year-on-year; consolidated H1 FY26 net sales: ₹3,712.18 crore, up from ₹3,130.49 crore year-over-year.

• Standalone EBITDA: ₹214 crore, up 45% year-on-year; EBITDA margin improved to 13.4% from 12.4% last year.

• Cash and cash equivalents at ₹475 crore net of debt; standalone net cash position at ₹639 crore as of Q2 FY26.

Outlook and guidance

• Management remains optimistic about sustained demand in domestic and international markets, with a cautious approach due to macroeconomic and geopolitical uncertainties.

• Continued focus on new product launches, especially in non-internal combustion engine technologies, and further updates expected in coming quarters.

• Margin improvement expected to continue, driven by product mix and export growth.

• Expansion of secured granular retail business in financial services and strong order pipeline in Power Gen and Industrial segments.