Jefferies initiated coverage on Kirloskar Oil Engines, with a “buy” recommendation on, and a price target of ₹2,815 apiece.
Jefferies said that Kirloskar Oil Engines is the second largest player in the power black up genset (DG) market.
The company is moving up the value chain by gaining market share in the margin accretive high horsepower (HHP) segment, the brokerage said.
It believes Kirloskar Oil Engines’ Earnings Per Share (EPS) should grow at a Compounded Annual Growth Rate (CAGR) of 22%, over financial year 2026-2030, and its return on equity (RoE), should improve to 20% from 18% led by margin improvement and capital allocation.
Jefferies values the stock at 45 times its estimated price-to-earnings for FY28, saying that the current valuations are sustainable.
It said data centres could add material upside to the stock going forward.
Last week, the company’s vice-chairperson and managing director Gauri Kirloskar said the data centre segment is only the beginning of a much larger opportunity.
The company is now focused on executing its first hyperscaler project successfully, which Kirloskar said will help win more business in one of the fastest growing markets for power generation equipment.
Last month, Kirloskar Oil Engines secured an order from HyerNext for the supply of 96 units or 192 MW of its 2,500 kVA Optiprime Dual Core power systems.
A total of six analysts have coverage on the Kirloskar Oil Engines stock, of them five have “buy” ratings and one has a “hold” recommendation.
Shares of Kirloskar Oil Engines gained 8% to hit an intraday high of ₹2,410 apiece on Monday. The stock was trading 4% higher at ₹2,318.7. It has gained 27.4% in the past month and 91.9% so far this year.
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