Views on Kirloskar Oil Engines 3QFY2016 Result: Angel Broking

Views of Mr. Milan Desai (Research Analyst - Mid Caps, Angel Broking) on Kirloskar Oil Engine 3QFY2016 results:

3QFY2016 Numbers below our expectation

"For 3QFY2016, Kirloskar Oil Engines (KOEL) reported a disappointing set of numbers. The top-line for the quarter declined by 1.8% YoY to INR 601cr which can be attributed to subdued operating environment for the overall genset industry as well as absence of large engines orders. The top-line was below our estimate of INR 630cr.

The employee expense as a percentage of sales increased by 34bp YoY to 8.5%; and other expenses increased by 181bp YoY to 19.6% of sales. This resulted in EBITDA margin contracting by 137bp YoY to 8.1%, which is lower than our estimate of 9.1%. There was an exceptional expense of INR10.4cr during the quarter related to Voluntary Retirement Scheme (VRS). Adjusting for the VRS expense, the net profit declined by 14.9% YoY to INR 29cr (against our estimate of INR 34cr). Currently, we have a NEUTRAL rating on the stock and may update our rating post management interaction."

Shares of KIRLOSKAR OIL ENGINES LTD. was last trading in BSE at Rs.242 as compared to the previous close of Rs. 240.8. The total number of shares traded during the day was 1007 in over 50 trades.

The stock hit an intraday high of Rs. 242.9 and intraday low of 238. The net turnover during the day was Rs. 241662.

Source : Equity Bulls

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