Kirloskar Oil Engines Limited Earnings Summary — Q1 FY2027
Kirloskar Oil Engines Reports Revenue Growth Amid Margin Pressure in Q1 FY2027
Quarterly Business Intelligence
AI Quarterly Scorecard™
Computed deterministically from the last 10 reported quarters.
Quarterly Business Momentum
- Revenue declined 5.5% sequentially in Q1 FY2027.
- Revenue of ₹2,000 Cr is 13.5% higher year-on-year.
- Revenue has compounded at 8.6% annualised over the last 10 quarters.
- Net profit of ₹114 Cr is 19.9% below the same quarter last year.
- Profit growth is trailing revenue growth this quarter.
- Net profit has compounded at -11.2% annualised across the period.
- Operating margin stands at 15.0% in Q1 FY2027.
- Operating margin compressed by 352 bps year-on-year.
- Over the last two years operating margin has contracted by 487 bps.
- PBT margin is 7.6%.
- Expenses grew 18.4% against revenue growth of 13.5%.
- Operating profit of ₹300 Cr is 8.0% lower year-on-year.
- Operating leverage has been under pressure recently.
- 6 of the last 6 measured quarters delivered year-on-year revenue growth.
- Overall quarterly business momentum scores 49/100 (Moderate) on the latest 10 quarters.
- Business momentum has softened and warrants monitoring.
Quarterly Financials
Last 10 Reported Quarters • All figures in ₹ Crore • Margins in %
| Metric | Trend | Latest Q1 FY2027 | Q4 FY2026 | Q3 FY2026 | Q2 FY2026 | Q1 FY2026 | Q4 FY2025 | Q3 FY2025 | Q2 FY2025 | Q1 FY2025 | Q4 FY2024 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | Stable | 2,000 | 2,116 | 1,873 | 1,948 | 1,762 | 1,749 | 1,454 | 1,505 | 1,632 | 1,660 |
| Expenses | Stable | 1,699 | 1,740 | 1,541 | 1,567 | 1,435 | 1,437 | 1,199 | 1,207 | 1,307 | 1,357 |
| Operating Profit | Stable | 300 | 376 | 331 | 382 | 327 | 312 | 255 | 298 | 325 | 303 |
| Operating Margin | Stable | 15.0% | 17.8% | 17.7% | 19.6% | 18.5% | 17.9% | 17.5% | 19.8% | 19.9% | 18.3% |
| Other Income | Volatile | 15 | 3 | -13 | 13 | 39 | 36 | 11 | 19 | 18 | 23 |
| Interest | Stable | 116 | 120 | 128 | 136 | 139 | 131 | 133 | 118 | 101 | 97 |
| Depreciation | Improving | 49 | 49 | 43 | 42 | 40 | 39 | 37 | 33 | 30 | 31 |
| Profit Before Tax | Improving | 151 | 210 | 148 | 216 | 187 | 179 | 95 | 166 | 211 | 198 |
| Tax | Improving | 40 | 55 | 39 | 57 | 48 | 53 | 27 | 41 | 55 | 52 |
| Net Profit | Improving | 114 | 159 | 111 | 162 | 142 | 131 | 71 | 128 | 159 | 149 |
| Net Margin | Stable | 5.7% | 7.5% | 6.0% | 8.3% | 8.1% | 7.5% | 4.9% | 8.5% | 9.8% | 8.9% |
Key Takeaways
- Consolidated revenue grew 13.5% YoY to ₹1,999.53 Cr, driven by the core B2B segment and financial services.
- Net profit for the quarter declined by 20% YoY to ₹111.06 Cr, impacted by higher employee benefits and finance costs.
- Finance costs surged to ₹115.96 Cr from ₹119.83 Cr in the prior quarter, primarily related to the NBFC (Arka) segment which constitutes the bulk of consolidated interest expense.
- The B2B segment remains the primary revenue driver, contributing ₹1,488.36 Cr (approx. 74% of revenue) during the quarter.
- The company completed further investments in subsidiaries Kirloskar Advanced Systems and Kirloskar International ME FZE during the period.
- Consolidated margins faced headwinds from increased other expenses, which rose to ₹329.16 Cr compared to ₹282.43 Cr in the same quarter last year.
- The B2C business (Water Management Solutions) was previously transferred to a wholly-owned subsidiary, leading to its classification as discontinued operations in standalone results but remaining part of consolidated B2C segment reporting.
Management Guidance
Management remains focused on pivoting toward high-horsepower engines and international markets while managing the capital-intensive scaling of the Arka financial services subsidiary.
Sentiment Shift
Deteriorating
While revenue growth remains robust, the significant drop in net profit and contracting margins relative to both the prior quarter and the same quarter last year indicate rising operational costs and interest burdens.
Outlook
The company is navigating a transition to stricter emission norms (BS-IV and B5.5) and scaling its NBFC arm, which provides growth scale but continues to weigh on the consolidated balance sheet through high debt and interest costs.
From the Annual Report (Key Quotes)
“The Company mainly operates in the business of manufacturing of Engines wherein two customer based reportable segments had been identified.”
“Identification of operating segments is consistent with performance assessment and resource allocation by the management.”
“The figures for the previous periods have been regrouped wherever required to make them comparable.”
Official Quarterly Documents
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This summary is AI-generated from Kirloskar Oil Engines Limited's latest quarterly filing and earnings call. For informational purposes only — not investment advice.