KOKirloskar Oil Engines533293Engineering, power systems,

Kirloskar Oil Engines is pivoting towards AI data center theme after winning a 192 MW diesel power system order from HyperNeXt, with stock hitting 30% upper circuit; management targets revenue over 16,000 crore rupees…

Kirloskar Oil Engines is pivoting towards AI data center theme after winning a 192 MW diesel power system order from HyperNeXt, with stock hitting 30% upper circuit; management targets revenue over 16,000 crore rupees by FY30.

By ScoutQuest · Mon 28 Sep 2026, 9:46 AM IST · 11 min read

Heard on Live television at 09:46:27 IST.

[09:40:27] It's both the ways rather there is one third more aspect where if someone is wanting to expand not sufficient steam supply is not sufficient they might add more capacity. One is the cost effective way of getting steam it's almost 30 35% cheaper. So that's the first thing. Second is when you get it from outsourced thing you can focus on your core activities which is your chemical pharma or maybe some industry. So these are the three basic reasons why industries want to shift. And you know most of the industries in the industry which are saturated by their space. They cannot grow because of their stream requirement is higher versus the boilers are not. So these are the major reasons why people have been shifting to common boilers nowadays. Okay. Uh let's talk a bit about this 311 crore uh order that that has been mandated. Where is this? What is the timeline of this? What details can you add Mr. Podhiya? So during the covid period government of India announced three belt truck parks to be established across the country. One was in Himachal Pradesh Una district and one is in Gujarat Jambusar and Andhra Pradesh Anakkapalli. So the part will support is supposed to house all the infrastructures within the premises concerted by the government. So that's the reason they came up with CTPs and other activities. And over and above these they included common boilers in the all the three parks, industrial parks. So they have in they had invited EPC contractors who can do the complete EPC because the design itself is something new which only I would say only rarely any companies do have specialty in doing such projects in India. So they invited such vendors which will do EPC plus OMR operations and maintenance and repair for 25 years. So our idea of getting this project is not majorly to get into EPC. EPC is not our business. We totally understand that there are no other companies that do can that can almost do the similar business here. So we will get EPC for us. It's an asset light business where we will get an opportunity to use the asset, spent the asset is invested by the government of India and the government there and use this asset to sell steam. Get a markup on that and that's the whole business model we are looking at. We get an exclusivity in that industrial area. It's an endorsement by the uh it's an endorsement by the government I would say to the concept of community boiler and uh our company. is the markup that you get and uh what would the visibility of revenues? I know 311 crores is the size of this project, but what is the visibility of revenues for you and the markup that you can Mr. Podhiya? So there will be some uh some savings in the EPC project as well where we be making some something on the exact numbers you'll not be able to clarify right now. Uh while there will be because it's a two year project and there will be changes escalation inflation everything involved. And uh talking about the OMR operations, will be a markup strategy the person exact percentage is yet to be decided in the letter of agreement which we are negotiating with them. And we hope that the letter of agreement will be there within uh the next couple of weeks. I see. [09:43:27] for FY26 revenues for a second and uh something that our research team has pointed out 26 that revenue in from coal trading in FY 26. It's a business that you have now uh ceased to operate. Does that mean in FY 27 now we're seeing no revenue trading? If that is the case, what is then the growth expected in FY 27? Does your steam business make up for that loss? So, the revenue that you agree with the revenue that came from cold was actually not adding to any EBITDA. Not not enough to the EBITDA. Rather, that's the reason that it was pulling down the percentage EBITDA, though the absolute number of EBITDA has grown. The reason of discontinuing uh coal trading is that it doesn't really add to the business. Number two, uh as you rightly mentioned, we have decided not to do any coal trading business here. But uh the growth we can uh foresee is from the lateral and vertical things that are happening. One, the existing customers have started consuming better steam quantity because of the uh Europe and US agreement. Our customers have come back to their are coming back to their normal levels. Second, there is a lateral expansion that is going on. Uh four projects are under construction out of uh them, almost three are supposed to be commissioned this year itself. So, all this all the projects will actually to the revenue and the profits going forward. And, yeah. Okay. Okay. So, Vishal, could you could you tell us uh in your assessment now that you are listening and can talk a bit about the future, what is it that you believe um potential number potential growth rates could look like? One, on the revenue front, but two also margin front, ebitda front as a whole. So, Ebitda as I said, we are into absolute pass-through mechanism where uh the coal uh uh becomes the fuel cost and the uh Ebitda numbers are predominantly fixed. So, with the growth in volumes, you'll surely see the Ebitda growing uh going forward. One, and second uh uh the volumes that we said that uh till the last year end we were 345 tons per hour capacity. The next 100 ton 120 tons is under construction. 18 18 tons will be uh done by the uh money that we have got in the IPO end use. So uh this will add to take around 645 tons. This 300 tons uh over and above this will take us to 900 tons going down into two two and a half three years where we can see the uh numbers growing. And when we say that the uh capacity is growing, we'll naturally see the uh volume consumption and revenue growing uh in line with them. What is that number, Vishal? Just trying to understand that. That's complex for me or my viewers to understand. So, I'm trying to understand from 420 to crores of revenues or an operating profit of 83 crores in FY 26, how do you go to? So, we are just very close to the Q1 results and uh you hope you understand we are in the good year. Okay. So, maybe we'll maybe we'll talk about these numbers post your Q1. Can I just ask one more question? One last question. [09:46:27] Which is that uh I heard you say at the opening answer that you are predominantly in the business of giving steam and nitrogen, but there are some optionalities uh that could come in. Could you talk a bit about that? Yeah, so we are working on uh five nines of nitrogen, lean locks, I mean liquid nitrogen, liquid oxygen. We're talking about oxygen gas right now, we are talking about instrument air. So we are evaluating all these things. We are talking lot of customers where we can supply such uh uh gases as well. leveraging this infrastructure that we have created just by adding new pipes to them. Also, we are looking at more and more of asset light business. So, for example, Himachal tender for us is also an asset light business where EPC is just a small business, but our ider use the asset for next 25 years. So, it adds to our asset light business. We are getting into more steam business. One agreement we already have in Halia uh in West Bengal. One more in Dahej SCZ we have recently. We're working with more companies. Hope we can get some more business on the asset light uh side again. So, these are the various options we'll have to more uh over and above the generation of uh the facilities uh steam by our facilities, investing in our facilities, uh looking for such more projects. Mr. Bodia, thank you so much for speaking with us and uh it's it's truly a different kind of a product selling steam. So that uh you know, companies don't have to set up uh boilers. But, of course, much more company then just steam and no smokes and mirrors there. We're looking forward to speaking Thank you. Thank you, Kamena. Thank you so much. Uh the company just pull up what it has been doing since its IPO, I think 30 odd percent up since its listing day on Steam House India. Yeah, 36% up. Now, let's talk about Kirloskar oil. Now, what we do over the next few days is quite interesting. You will recall that Goldman Sachs talked about at least 42 Indian companies that do have an AI trade and uh uh Neeraj that was something got us thinking, right? Which are these companies and what do they do? Yeah, most people thought of five or names 42 was a large list and within uh some of the basic businesses as well which on on paper or in the first glance may not appear to be AI enablers. There were some interesting names. We are trying to get one company every day from that list. Yeah, let's talk to Kirloskar Oil today. That's in focus as the company is betting big on the AI data center boom after bagging a 190 megawatt order from Hyper next. Before we speak to the company and understand what they are doing on the AI front, Parth is joining in for more details. Parth. Well, uh 5 year old in and Jenset's maker, but the big thing about this counter is that they are shifting towards that AI to towards capturing that AI data center theme. Now, on 19th of June they had won 192 megawatt data center order and on that news the stock closed at [09:49:27] oper circuit of 30%. The customer for that order was HyperneX, which is an AI ready hyper scale data builder. Uh this is a big opportunity for Kirloskar because data centers afford even seconds of power failure. And hence why the backup Gen sets form a core part of that data centers and they have a product in this space called OptiPrime system which packs multiple power into a single unit. So that saves the floor space for the data center developer at the high. The supply revenue for this order is expected within FY27 and the management further targets a revenue of over 16000 crores for the company by FY30. So that's the entire outlook on Kirloskar oil engines on the back of these tailwinds from the data center theme. Okay. Rahul Sahai CEO of Kirloskar Oil Engines joining in and that was some interesting perspective that Partha put in. It's a 75 year old company now being seen as possible AI. Mr. Sahai can you elaborate on that and thank you so much for joining us this morning. Thank you so much for having me here. Uh yeah I mean I think uh we've we've seen as a legacy manufacturer and uh we have found ourselves in an interesting spot where uh we specialize in engineered power systems. And uh and you know we've uh we are in this space where we truly understand the Indian customer and all profiles of customers. We see interest from a lot of local data centers as well as global data centers as well. So it's it's been an interesting transformation and theme over the last four years. Okay, let's talk about this latest order with Hyper-NeXt. What exactly will you be doing and what is the size and scope of that order? This was set the stage for many more similar orders. Um look, the we we knows that it's a 192 MW uh you know, diesel power system there. And uh we would be doing the full scope uh that is supply, testing, commissioning, along with a long-term uh operations, maintenance contract, and that's going to be a multi- engagement with the customer. Uh in my opinion, that's a start of uh things to come. I mean, we've been working pretty solidly from uh in for this segment. Uh teams. Uh so, certainly see that as a as a big opportunity for us. Rahul, good morning and Any and I'm just trying to understand you you and your opening answers saying there is this place that you suddenly found yourself in if you will. So some serendipity, some plan etc. Uh how much of this framing of you being a pix and shovel player on AI do you accept and what is that split if you will, if you were to say

Nothing here is a view, opinion or recommendation of ScoutQuest, its parent, directors or employees. ScoutQuest is a technology company: this page was assembled automatically from public sources using artificial intelligence, and may contain errors or omissions. Confirm everything against the original source before you act on it. Any use of this page is at your own risk, and neither ScoutQuest nor its parent, directors or employees accepts liability for it.

About ScoutQuest · Logos provided by Logo.dev