Kirloskar Oil Engines Limited (KOEL), a leader in manufacturing internal combustion engines and generator sets, has reported robust financial results for the first quarter, while also announcing a change in auditors for its material subsidiary.

Strong Financial Performance

KOEL achieved its highest-ever Q1 standalone net sales of ₹1,434.00 crore, marking an 8% year-over-year increase. The company's consolidated revenue from operations rose to ₹1,763.80 crore, up from ₹1,631.87 crore in the same quarter last year.

Key financial highlights for Q1 include:

Auditor Change at Material Subsidiary

In a significant development, G. D. Apte & Co., Chartered Accountants, have resigned as statutory auditors of Arka Financial Holdings Private Limited (AFHPL), a material subsidiary of KOEL, effective August 6. The resignation is due to RBI guidelines limiting audit firms to a maximum of eight RBI-regulated NBFCs.

AFHPL has applied for registration with RBI as a Core Investment Company on June 29, which would make it an RBI-regulated entity upon registration. To fill the vacancy, AFHPL's Board of Directors has approved the appointment of Sudit K. Parekh & Co. LLP Chartered Accountants as statutory auditors for a three-year term starting August 6, subject to shareholder approval.

Business Segment Performance

KOEL's consolidated results show strong performance across its business segments:

1. Business to Business (B2B): Revenue of ₹1,276.32 crore
2. Business to Customer (B2C): Revenue of ₹291.78 crore
3. Financial Services: Revenue of ₹195.70 crore

Management Commentary

Gauri Kirloskar, Managing Director of Kirloskar Oil Engines, commented on the results: "KOEL has delivered its highest-ever Q1 standalone net sales at ₹1,434.00 crore, marking a strong start and setting a new benchmark in our growth trajectory. I am very pleased with the progress that we are making as an organization, especially on the engineering and product side."

She added, "All the new products that we have launched recently, whether it is the Sentinel series or the Optiprime series are performing well in the market, and we see good acceptance from our customers. On the Industrial side, we are working closely with our key customers and looking for opportunities to deepen our relationship with them."

Other Developments

• The company incorporated Kirloskar International ME FZE as a wholly-owned subsidiary in Jebel Ali Free Zone, UAE, with an initial investment of ₹1.17 crore.
• KOEL allotted 75,463 fully paid-up equity shares of ₹2 each under its Employee Stock Option Plan 2019.
• The Board of Directors approved an investment of up to US$ 2,000,000 in Kirloskar Americas Corporation, USA, a wholly-owned subsidiary, to further business in the US market.

With a strong start and strategic moves in place, Kirloskar Oil Engines Limited appears well-positioned for continued growth.

Kirloskar Oil Engines Limited (KOEL), a leader in manufacturing internal combustion engines, generator sets, and agricultural equipment, has announced its financial results for the first quarter, showcasing a mix of growth and challenges.

Record-Breaking Q1 Sales

KOEL achieved its highest-ever Q1 standalone net sales of ₹1,434.00 crore, marking a strong start. This represents an 8% year-on-year increase from ₹1,334.00 crore in the same quarter of the previous year, setting a new benchmark in the company's growth trajectory.

Financial Highlights (Standalone)

• Revenue from operations rose to ₹1,444.65 crore, up from ₹1,342.91 crore in the same quarter last year.
• EBITDA increased by 9% to ₹190.00 crore, compared to ₹175.00 crore in the previous year's Q1.
• EBITDA margin slightly improved to 13.2% from 13% in the previous year.
• Net profit saw a 5% increase, reaching ₹123.00 crore, up from ₹117.00 crore in the same period last year.

Consolidated Performance

On a consolidated basis, KOEL reported:

• Revenue from operations of ₹1,763.80 crore, an 8% increase from ₹1,631.87 crore in the same quarter of the previous year.
• Net profit of ₹138.92 crore, compared to ₹156.45 crore in the same period last year.

Segment-wise Performance

Management Commentary

Gauri Kirloskar, Managing Director of Kirloskar Oil Engines, expressed satisfaction with the company's progress, particularly in engineering and product development. She highlighted the success of newly launched products, including the Sentinel series and Optiprime series, which have been well-received in the market.

"We are making progress on all the strategic pillars of our 2B2B strategy, and over the next quarters, you will hear more about it," Kirloskar stated. She also noted the resilience of the domestic economy and sustained demand levels.

Strategic Developments

• KOEL has incorporated Kirloskar International ME FZE as a wholly-owned subsidiary in Jebel Ali Free Zone, United Arab Emirates, with an initial investment of ₹1.17 crore.
• The company allotted 75,463 fully paid-up equity shares under its Employee Stock Option Plan 2019.
• Additionally, KOEL granted 21,129 new stock options to eligible employees at an exercise price of ₹519.06 per option.

Discontinued Operations

La-Gajjar Machineries Private Limited (LGM), a wholly-owned subsidiary of KOEL, completed the sale of its 'Cables, Wires & Pipes business' to M/s Vira Logistics for ₹10.70 crore, subject to closing adjustments.

Outlook

With a strong start and strategic initiatives in place, Kirloskar Oil Engines appears well-positioned to capitalize on market opportunities. The company's focus on product innovation, expansion into new markets, and operational efficiency are expected to drive growth in the coming quarters.

Investors and stakeholders will be watching closely to see how KOEL navigates the evolving economic landscape and leverages its strengths to maintain its market leadership in the engine and power generation sectors.