Motilal Oswal has raised its target price for Kirloskar Oil Engine stock, forecasting over 70% upside. Following this upgrade, the stock price surged 3% today.
As per brokerage, the company is strategically positioning itself to capture a larger market share in the powergen industry. With demand improving sequentially, industry volumes are projected to reach 36,000-38,000 units in Q4, compared to 32,000 in Q3. The firm is focusing on expanding its presence in the high-kilovolt-ampere (kVA) range, particularly in the High Horse Power (HHP) segment, aiming for a 400-500 basis point increase in market share over the next one to two years. Analysts expect powergen revenues to see significant growth from FY26 onwards.
In the industrial segment, Motilal Oswal states that the company is poised for a robust 14% revenue CAGR between FY24 and FY27. This growth will be driven by new product launches and an increased focus on the construction and infrastructure sectors, which continue to see rising demand.
Despite its strong fundamentals and aggressive expansion plans, the stock is currently trading at a significant discount compared to the market leader.
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