Kirloskar Oil Engines Shares Extend Losing Streak As Investors Book Profits

Mumbai, June 30: Kirloskar Oil Engines Ltd. (KOEL) share price extended decline for a fourth straight trading session on Tuesday, taking losses to nearly 14% from the record high touched on June 23. The stock remained under pressure despite the company’s optimistic growth outlook and a bullish view from brokerage Motilal Oswal Financial Services, which reiterated its “Buy” rating on the stock. 

The recent correction follows a sharp rally in KOEL shares, with investors appearing to book profits after the stock hit an all-time high. Analysts, however, believe the long-term investment case remains intact, supported by the company’s expanding presence in high-growth segments such as data centres, power generation and exports. As of writing the stock was down 3% at Rs 2,365.  

Data centre opportunity boosts growth outlook 

A key catalyst for KOEL has been its entry into the rapidly growing data centre power solutions market. 

Stock has rallied over 23% over a month touching a record on June 23. Source: Google 

The company recently secured an order from a hyperscale data centre customer, a milestone that management described as a significant breakthrough. The project is expected to be executed during FY27 and includes not only the supply of power generation equipment but also a long-term annual maintenance contract, providing visibility on recurring service revenues. 

As demand for artificial intelligence, cloud computing and digital infrastructure accelerates, data centres are increasingly emerging as a major growth driver for diesel and gas-based backup power systems. KOEL believes this segment could become an important contributor to its revenue mix over the coming years. 

Motilal Oswal remains positive 

Despite the recent weakness in the share price, Motilal Oswal Financial Services has maintained its “Buy” recommendation on KOEL and raised its target price to ₹2,750. 

The brokerage expects the company to benefit from multiple structural growth drivers, including rising demand for captive power solutions, increasing investments in data centres, strong export opportunities and a growing share of higher-margin businesses. 

Why the stock is under pressure 

The recent decline appears to be driven more by profit booking than by any deterioration in the company’s fundamentals. 

KOEL shares had rallied sharply in recent months, prompting some investors to lock in gains after the stock reached record levels. The correction has also come amid broader volatility in industrial and capital goods stocks following their strong run-up earlier this year. 

Analysts note that while short-term fluctuations may persist, the company’s order pipeline and improving business mix continue to support a constructive long-term outlook. 

Outlook 

Going forward, investors will closely monitor the execution of KOEL’s data centre orders, fresh order wins and management commentary on demand across industrial, infrastructure and export markets. 

The company is also expected to benefit from increasing investments in digital infrastructure, where reliable backup power remains a critical requirement. If it continues to secure additional hyperscale data centre customers, analysts believe KOEL could strengthen its position in one of the fastest-growing segments of the power equipment market. 

Although the stock has corrected from its recent highs, brokerages remain optimistic that its diversified growth drivers and improving earnings profile could support further upside over the medium to long term. 

Source

• https://www.nseindia.com/get-quote/equity/KIRLOSENG/Kirloskar-Oil-Engines-Limited