Kirloskar Oil Engines Reports Mixed Performance in Q2 FY24-25, Investors Advised to Hold

Kirloskar Oil Engines, a midcap company in the diesel engines industry, recently announced its financial results for the quarter ending September 2024. The company's stock has been given a 'Hold' call by MarketsMOJO.

According to the financials, Kirloskar Oil has seen a flat performance in the second quarter of FY24-25, with a score of 0 compared to 15 in the previous three months. However, there are some positive aspects to the company's financials. The operating cash flow has been consistently growing over the last three years, with the highest amount of Rs -468.78 crore generated annually. The profit after tax (PAT) for the first half of the year has also shown a growth of 35.34% year on year, indicating a positive trend in the near term. Additionally, the company has a strong cash position with Rs 740.34 crore in cash and cash equivalents in the last six half-yearly periods.

On the other hand, there are some areas of concern for Kirloskar Oil. The operating profit to interest ratio has been consistently decreasing over the last five quarters, indicating a deteriorating ability to manage interest payments. The interest cost has also increased by 16.16% quarter on quarter, suggesting an increase in borrowings. The profit before tax (PBT) has also fallen by -6.4% compared to the average PBT of the previous four quarters. The company's debt-equity ratio is at its highest in the last five half-yearly periods, indicating a higher reliance on borrowing for operations. Lastly, the non-operating income has shown a significant increase in the last five quarters, which may not be sustainable in the long run.

Overall, Kirloskar Oil Engines has shown a mixed performance in the second quarter of FY24-25. While there are some positive aspects to the financials, there are also some areas of concern that need to be addressed. Investors are advised to hold their position in the company's stock and monitor its performance closely.