Kirloskar Oil Engines Receives Favorable GST Order, Significantly Reducing Tax Liability

Kirloskar Oil Engines Limited (KOEL) has received a partial favorable order from the Deputy Commissioner of State Tax, Pune, resulting in a substantial reduction of its Goods and Services Tax (GST) liability. The order, dated December 9, 2025, addresses the Input Tax Credit (ITC) mismatch for the fiscal year 2021-22.

Significant Reduction in Tax Demand

The order has led to a notable decrease in KOEL's tax obligations:

Category	Original Amount (Rs.)	Revised Amount (Rs.)	Reduction (%)
Tax Demand	9,74,06,747.00	23,96,748.00	97.54
Penalty	1,34,41,427.00	2,47,734.00	98.16
Interest	7,62,33,455.00	19,66,778.00	97.42

This favorable outcome represents a significant relief for the company, with reductions of over 97% across all categories.

Company's Response and Future Actions

Kirloskar Oil Engines has stated that it does not foresee any material impact on its financial or operational activities as a result of this order. However, the company plans to file an appeal before the appropriate authority within the prescribed timelines, indicating that it may seek further adjustments or clarifications regarding the tax assessment.

Implications for Investors

While the substantial reduction in tax liability is a positive development for Kirloskar Oil Engines, investors should note that:

The company's proactive approach in addressing tax issues demonstrates good corporate governance.
The planned appeal suggests that KOEL may be seeking additional reductions or clarifications.
The lack of expected material impact on financials indicates that the company had likely provisioned for this contingency.

Investors and stakeholders should continue to monitor any further developments related to this tax matter and its potential impact on Kirloskar Oil Engines' financial position.

Note: This article is based on the information provided in the company's regulatory filing dated December 9, 2025, and does not include any subsequent updates or developments.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+0.01%	-4.51%	+17.69%	+23.31%	-4.34%	+814.59%

Kirloskar Oil Engines Limited (KOEL) has reported a stellar performance for the second quarter of FY2026, with revenue crossing the INR 1,500 crore mark for the first time. The company's robust growth was driven by strong performances across all business units, particularly in the Power Generation and Industrial segments.

Key Financial Highlights

Metric	Q2 FY2026	YoY Growth
Net Sales	1593.00	35%
EBITDA	214.00	45%
Net Profit	141.00	44%
EBITDA Margin	13.40%	100 bps

Segment-wise Performance

Power Generation

The Power Generation business unit anchored the company's performance, delivering a strong 41% year-on-year growth in sales and achieving its highest ever quarterly revenue of INR 678.00 crores. This robust performance further strengthens KOEL's market leadership position.

Industrial Business

The Industrial business unit also delivered a strong performance with 40% year-on-year sales growth, driven by healthy traction in both defense and railways sectors. The company's Defense business continued its positive trajectory, supported by emergency procurement orders and steady progress on key strategic programs.

International Business Growth

KOEL's international business demonstrated strong diversification and strategic progress:

Overall International B2B sales grew by 39% year-on-year
B2C sales registered a 77% year-on-year increase
Exports for the first half of the year exceeded INR 320.00 crores, reflecting broad-based strength across markets

Strategic Initiatives

The company has recently announced the restructuring of its B2C business, which will be transferred to its wholly-owned subsidiary, LGM, by way of slump sale. This move aims to:

Maintain dedicated focus on each segment
Drive greater efficiency through structures best suited to their respective customer needs

Management Commentary

Gauri Kirloskar, Managing Director of KOEL, commented on the results:

"Q2 has been a strong quarter for KOEL with net sales crossing the INR 1,500 crore mark for the first time. I would like to congratulate the entire KOEL team on achieving this new milestone."

She added, "We remain focused on the planned rollout of our products in Q3 FY '26, which we expect will further enhance our competitive position across the domestic power generation business."

Outlook

The management remains optimistic about the coming quarters, citing:

Healthy market demand
Encouraging results across key product segments
Positive reception of new product launches
Steady progress on strategic priorities outlined in the 2B2B vision

With a strong performance in the first half of FY2026 and a positive outlook for the future, Kirloskar Oil Engines appears well-positioned to capitalize on growth opportunities in both domestic and international markets.