Kirloskar Oil Engines surges 18%, hits over 5-yr high after huge block deal

Shares of Kirloskar Oil Engines (KOEL) moved higher by 18 per cent to Rs 384.30, also its 52-week high, on the National Stock Exchange (NSE) in Wednesday's intra-day trade after over 25 million equity shares of the company changed hands on the exchange via block deal.

The stock surpassed its previous high of Rs 371.65, hit on November 18, 2022. It was trading at its highest level since February 2018. In the past one year, the stock has zoomed 200 per cent as compared to 12 per cent rise in the S&P BSE Sensex.

As many as 25.62 million equity shares, representing 17.7 per cent of total equity, worth Rs 825 crore of KOEL changed hands on the NSE, the exchange data shows. The block deal was executed in the first session, between 08:45 am and 09:00 am. The names of the buyers and sellers could not be ascertained immediately.

As on December 31, 2022, promoter & promoter group held 85.96 million shares (59.42 per cent stake) in KOEL, the shareholding pattern data shows.

On February 9, 2022, Nihal Kulkarni and his family conveyed their intention to discontinue as ‘Promoter’ of the Company or otherwise directly / indirectly participate in the management of the Company and also sell their equity shares in compliances with applicable laws/regulations, KOEL had said in FY22 annual report.

KOEL, a flagship company of the Kirloskar Group, is one of India's largest diesel genset manufacturers with dominant market leadership.

KOEL is a leader in the manufacturing of engines, farm equipment and generator sets with a sizable presence in international markets. It also manufactures world class diesel engines for construction equipment. It specialises in manufacturing air-cooled and liquid-cooled engines for diesel generator sets across a wide range of power outputs (2kVA to 1500 KVA).

The company has a significant presence in diesel and electric pump sets, power tillers, specialised fishing engines markets, among others. The Company also has a strong distribution network throughout Middle East and Africa with offices in Dubai, South Africa, Kenya and in Huston, USA.

The Company also offers engines that operate on alternative fuels such as biodiesel, natural gas, and biogas. In the power generation segment, the Company is one of the largest selling genset brands in the world and has highest loT connected DG sets.

While announcing December quarter results on February 10, 2023, the management said the company saw strong demand across, in both domestic and international markets.

Changes in the rainfall pattern during this monsoon season resulted in a change in the demand patterns in the pumps segment. In the international markets, while there was an overall softening in the market, KOEL delivered strong results by focusing on the right product mix and the right geographies. From an immediate to medium term outlook standpoint, the management said it sees strong market demand, but uncertainties remain over inflation, supply chain disruptions and geo political dynamics, it added.