Kirloskar Group plans to invest ₹5,000 cr to double revenue by 2030
The group, comprising four listed companies – Kirloskar Oil Engines Ltd (KOEL), Kirloskar Pneumatic Company Ltd, Kirloskar Ferrous Industries Ltd and Kirloskar Industries Ltd – plans to invest ₹Rahul Kirloskar, chairman of Kirloskar Pneumatic and Kirloskar Ferrous, said there will be ₹5,000 crore in new production capacities in the next three years.
The group’s revenue growth has been stagnant over the past decade, largely due to a lack of new products. But the transformation, which began about three years ago, has resulted in sharp revenue growth across companies. As stock prices increased in four companies in 2023 and 2024, shareholders’ interest in stocks also increased. Shares have since clawed back some of the gains; All four stocks have lost more than a quarter of their value since the beginning of 2025.
“We have shifted gears and see a bright future ahead,” Kirloskar said.
The recession coincided with a protracted war within the Kirloskar family, involving Atul and Rahul on one side and their brother Sanjay Kirloskar, chairman of listed Kirloskar Brothers Ltd, on the other. The hostility arising from the division of property continues.
growth path
The group’s revenue growth is expected to come largely from KOEL. ₹5,073 crore in fiscal year 2025 (FY25). The company is targeting $2 billion in revenue (approximately ₹17,700 crore by 2030.
Led by Gauri Kirloskar, daughter of Atul and Aarti Kirloskar, the company is in the midst of a transformation by foraying into new segments such as high horsepower engines and engines running on other fuels besides diesel. KOEL has historically produced diesel engines used in power generation and industrial applications.
Gauri Kirloskar, the company’s general manager, said, “While we said we were a diesel engine manufacturer, we started to say that we are an internal combustion engine manufacturer that can work with any fuel.”
“What we really want to position ourselves for in the next five years is to be a global technology leader when it comes to power solutions,” he said. This includes internal combustion engines, hybrid engines and fuel cells, he said.
The company’s biggest growth engine will be the sale of backup power generators to data centers; This is a business the company plans to enter and scale rapidly. The company will also focus on expanding its exports, which benefit from comparable emission norms in India and key Western markets such as the US and Europe. The company will also accelerate the scaling of its existing but small railway and defense businesses.
When the younger Kirloskar took over as KOEL’s managing director in 2022, he set out a vision of doubling its business within three years. Since then, the company has managed to increase its revenue by 1.6 times and its profits have more than doubled. Kirloskar attributes this transformation to finding the right leadership for each of the company’s businesses.
“We were able to provide a platform for leaders to see the growth path within the company and have some degree of autonomy,” he said.
The company’s market capitalization is just under 0,000 ₹13,000 crore compared to Kirloskar Pneumatic ( ₹7,600 crore), Kirloskar Demirli ( ₹8,500 crore) and Kirloskar Industries ( ₹4,100 crore). Kirloskar Pneumatic produces various compressors for industrial applications, while Kirloskar Ferrous produces products from cast iron. Kirloskar Industries is a holding company.
Real estate attack, NBFC growth
Arka Fincap Ltd, a non-banking finance company (NBFC) and a subsidiary of KOEL, is considering moving into retail lending by financing used vehicle purchases and offering small ticket loans against property. A non-bank lender ₹6,000 crore loan book split between wholesale loans to real estate companies and loans to property with average ticket size ₹1 crore.
Gauri Kirloskar said KOEL plans to spin off Arka Fincap, which was founded in 2018, into a separate company by 2030.
Meanwhile, the group also started a real estate business that will use vacant land parcels. It has already built its first building of 150,000 square feet around Pune’s Kothrud; All Kirloskar group companies moved their headquarters to this building. It is now developing a second building on the same site with a floor area of 1.5 million square metres. Rahul Kirloskar said that the project will be ready for rent by 2028. “Our intention is to develop this business and bring it to scale over the next five years.”
Analysts are optimistic
“KOEL has strategically restructured its business to strengthen group values and develop a strong culture, not only to prepare for the 2X-3Y (double business in three years) journey, but also to look at the bigger picture, which will reach $2 billion by FY30,” analysts at Antique Stock Broking noted on Aug. 8.
Analysts at JM Financial on August 7 said the launch of the new product in the high horsepower segment, support for exports, demand recovery in the domestic power generation sector and healthy industrial segment outlook bode well for the company in the medium and long term.
Analysts also remain optimistic about Kirloskar Pneumatic and Kirloskar Ferrous.
