Kirloskar Oil Engines received a show cause notice from the Deputy Commissioner of State Tax, Pune, demanding a total of ₹5.82 crore comprising tax, interest, and penalty regarding an Input Tax Credit (ITC) mismatch for FY 2022-23. The company stated on June 1, 2026, that it does not anticipate any material impact on its financial or operational activities as a result of this demand.

The notice, dated June 1, 2026, was issued under Section 73 of the Maharashtra Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017. It specifically addresses alleged discrepancies in the ITC claimed during the financial year 2022-23.

Breakdown of Demand

The order details the specific financial components of the demand imposed by the tax authority. The table below outlines the tax, interest, and penalty amounts specified in the notice.

Company Response

Kirloskar Oil Engines Limited has indicated that it is currently in the process of preparing and filing a necessary reply before the appropriate authority within the prescribed timelines. The disclosure was made to the stock exchanges pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The company confirmed that while it acknowledges the receipt of the notice, it maintains that the development will not have a material effect on its ongoing activities.

Kirloskar Oil Engines has announced its audited financial results for the quarter and year ended March 31, 2026, delivering record-breaking standalone quarterly net sales of ₹1,522 crore, marking a 24% year-on-year growth. For the full financial year, standalone net sales grew by 25% to ₹5,604 crore. The Board of Directors has recommended a final dividend of ₹4.50 per equity share (225%) of face value ₹2 each, subject to shareholder approval. This is in addition to an interim dividend of ₹2.50 per share already paid, bringing the total dividend for the year to 350%. In its post-results concall, management outlined an ambitious growth roadmap, targeting $2 billion in revenue by fiscal year 2030.

Standalone Financial Performance

On a standalone basis, the company reported strong growth across key metrics for the year ended March 31, 2026. Net profit for the full year stood at ₹461.02 crore compared to ₹431.93 crore in the previous year. Profit before exceptional items and tax for the year was ₹623.59 crore versus ₹502.76 crore previously. The EBITDA margin improved to 13.10% from 12.20% in the prior year. Exceptional items for the year amounted to an expense of ₹29.68 crore, relating to the incremental impact of the New Labour Codes notified by the Government of India on November 21, 2025. Total Comprehensive Income for the year from continuing and discontinued operations stood at ₹462.20 crore on a standalone basis.

The following table summarises the key standalone financial metrics:

Post the transfer of the B2C business segment effective October 11, 2025, the standalone operations are classified under the B2B segment only. For the year ended March 31, 2026, discontinued operations contributed revenue from operations and other income of ₹318.07 crore and a profit after tax of ₹19.52 crore on a standalone basis. Standalone reserves (excluding Revaluation Reserve) as shown in the audited balance sheet stood at ₹3,325.43 crore as at March 31, 2026, with paid-up equity share capital at ₹29.07 crore.

Consolidated Financial Performance

At the consolidated level, the company reported robust growth for the year ended March 31, 2026. Revenue from operations rose to ₹7,701.01 crore from ₹6,329.14 crore in the previous year. Consolidated net profit for the year stood at ₹562.46 crore compared to ₹475.82 crore previously. Profit attributable to owners of the Company for the year was ₹574.32 crore versus ₹489.15 crore in the prior year. Total Comprehensive Income on a consolidated basis for the year stood at ₹594.58 crore. The consolidated balance sheet reflects total assets of ₹10,852.44 crore as at March 31, 2026, with consolidated reserves (excluding Revaluation Reserve) at ₹3,591.12 crore.

The following table summarises the key consolidated financial metrics:

| Metric: | Q4 FY26 | Q4 FY25 | YoY | FY26 | FY25 | YoY | | ---: | :--- | :--- | :--- | | Revenue from Operations (₹ Cr): | 2,116 | 1,749 | 21% | 7,701 | 6,329 | 22% | | PAT (₹ Cr): | 162 | 111 | 47% | 582 | 416 | 40% | | Total Comprehensive Income (₹ Cr): | 154.37 | 125.46 | — | 594.58 | — | — | | Basic EPS (₹): | 10.91 | 9.03 | — | 39.53 | — | — | | Diluted EPS (₹): | 10.86 | 9.01 | — | 39.38 | — | — |

Growth Guidance and Capital Expenditure Plans

During the post-results investor conference call, management shared key guidance on the company's long-term growth strategy. Kirloskar Oil Engines is progressing towards its goal of becoming a $2 billion company by fiscal year 2030. To support this ambition, management plans to invest approximately INR 1,400 crores in capital expenditure over the next two years (FY27 and FY28) for capacity augmentation.

The following table outlines the key details of the planned capital expenditure:

The INR 1,400 crore CapEx is specifically earmarked for a new building and new production lines at the Kagal plant, primarily for High Horsepower capacity enhancement, while also supporting international market traction. Management indicated that this new CapEx is expected to yield an asset turn in the range of 4 to 5, potentially generating INR 5,000–6,000 crores in peak revenue. Separately, the previously announced INR 700 crores CapEx for 50,000 engines is expected to be online by April of next year.

Key Corporate Developments

During the year, the Board approved the transfer of the company's B2C business segment — Water Management Solutions (WMS) Domestic & Exports Business — by way of slump sale to its wholly owned subsidiary, KOEL Fluid Dynamics Private Limited, effective October 11, 2025. Additionally, the company incorporated a new wholly owned subsidiary, Kirloskar Advanced Systems Private Limited, with effect from March 30, 2026, with an initial investment of up to ₹9 crore. During the quarter ended March 31, 2026, the company allotted 27,795 fully paid-up equity shares of ₹2 each under the KOEL Employee Stock Option Plan 2019, increasing paid-up equity share capital to 14,53,59,209 shares.

Investor Conference Call

Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the company held a conference call for investors and analysts on May 14, 2026, at 7:00 p.m. IST to discuss the audited financial results for the quarter and year ended March 31, 2026. The results were reviewed and recommended by the Audit Committee and approved by the Board of Directors in their respective meetings held on May 14, 2026, and are audited by the Statutory Auditors of the Company. The audio recording of the conference call is available on the company's website.