Kirloskar Oil Engines (KIRLOSENG) Q3 24/25 earnings summary

Executive summary

• Q3 FY25 saw subdued results due to lower power gen demand from CPCB IV+ emission norm changes, impacting LMHP segments, while HHP demand and market share improved.

• B2C segment completed major plant consolidation, causing temporary production and sales impact, but the new facility is now fully operational.

• International business faced a year-on-year decline due to absence of last year's one-time orders, but export B2C grew 18% driven by agri engines and pump exports.

• Achieved 7% year-over-year revenue growth YTD FY25, reaching ₹3,672 Cr standalone; consolidated sales grew 9% YTD to ₹4,558 Cr.

• Interim dividend of Rs. 2.50 per share (125%) declared, with payment by 12th March 2025.

Financial highlights

• Standalone Q3 revenue grew 3% year-on-year to INR 1,154 crore; EBITDA was INR 117 crore (10.1% margin), and net profit was INR 65 crore, down 17% year-on-year.

• Nine-month standalone sales reached INR 3,672 crore, up 7% year-on-year; EBITDA at INR 438 crore (11.8% margin), and net profit at INR 280 crore, up 10% year-on-year.

• Consolidated Q3 revenue was INR 1,454 crore, up 4% year-on-year; net profit was INR 58 crore, down 37% year-on-year.

• Financial services segment revenue grew 43% year-on-year to INR 212 crore; AUM at INR 6,740 crore.

• Interim dividend of 125% (INR 2.50 per share) approved.

Outlook and guidance

• LMHP demand expected to recover to pre-norm change levels in coming quarters; HHP segment to continue growth.

• B2C business performance expected to improve post-plant consolidation.

• Focus on manufacturing execution, technology roadmap, and international market share expansion.

• Power gen demand anticipated to normalize over the next couple of quarters as CPCB II inventory is depleted.

• Management remains confident in product portfolio and market recovery.