Shares of Kirloskar Oil Engines Ltd (KOEL) have rallied 34 percent over the past two trading sessions, driven by a large data-centre order, brokerage upgrades and expectations of stronger growth in the high-horsepower engine business.
The stock hit a 20 percent upper circuit in the previous session and extended gains on Tuesday. During the day, shares climbed as much as 13.7 percent to ₹2,720.35, compared with the previous close of ₹2,390.80.
With a market capitalisation of ₹36,092.75 crore, the company manufactures diesel and gas engines, power generator sets and pumping solutions.
Data-centre order triggers rally
Investor sentiment improved after KOEL secured an order from HyperNext for 96 units, or 192 MW, of its 2,500 kVA Optiprime Dual Core power systems.
The order marks the company’s entry into the hyperscaler data-centre segment, which has traditionally been dominated by larger players.
The win also strengthened confidence in KOEL’s efforts to build a presence in a fast-growing and higher-margin market.
Brokerages raise targets
Motilal Oswal Financial Services retained its “Buy” rating and increased its target price to ₹2,350 from ₹1,900.
The brokerage said:
- The data-centre order validates KOEL’s expansion strategy.
- A ₹700 crore capex programme and a proposed ₹1,400 crore investment could help the company capture more opportunities.
- Large industrial orders over the next two years are expected to support revenue growth.
- Higher volumes could improve operating leverage and margins.
- The valuation gap with Cummins India could narrow over time.
JM Financial upgraded the stock to “Buy” from “Add” and raised its target price to ₹2,430 from ₹1,955.
According to the brokerage:
- The 192 MW order is a breakthrough in the colocation and hyperscale data-centre market.
- The order strengthens KOEL’s competitive position against Cummins India.
- Planned expansion of high-horsepower engine capacity is aligned with rising demand.
Focus on HHP engines
Market participants have also turned positive on the company’s push into the high-horsepower (HHP) engine segment.
The planned capacity expansion is expected to add:
- 20,000 engines annually
The company is targeting demand from:
- Data centres
- Industrial power solutions
These segments are viewed as potential drivers of future revenue growth.
Technical momentum adds support
The rally was also supported by strong price momentum.
The stock was trading above its:
- 50-day EMA
- 200-day EMA
Sustained buying interest helped accelerate gains during the past two sessions.
Financial performance
For the quarter ended March 2026:
- Revenue increased to ₹2,116 crore from ₹1,749 crore, up 21 percent.
- Net profit rose to ₹155 crore from ₹127 crore.
Other key metrics include:
- ROCE: 14.7 percent
- ROE: 17.7 percent
- Five-year profit CAGR: 25.4 percent
About the company
Kirloskar Oil Engines Limited has been operating for more than 75 years and manufactures internal combustion engines, gensets and integrated power systems.
Its product portfolio ranges from 1 kW to 10 MW and serves sectors such as:
- Infrastructure
- Data centres
- Real estate
- Defence
- Marine
- Railways
The company has operations across India, the Middle East, Africa and the Americas.
TL;DR:
Kirloskar Oil Engines shares have jumped 34% in two sessions after the company won a 192 MW data-centre order from HyperNext. Brokerage upgrades, expansion plans and strong financial performance further boosted sentiment.
AI summary:
- KOEL shares gained 34% in two trading sessions.
- The rally followed a 192 MW data-centre order from HyperNext.
- Motilal Oswal and JM Financial raised target prices and maintained bullish views.
- The company is expanding capacity in high-horsepower engines.
- Revenue and profit grew 21% and 22%, respectively, in March 2026.
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