Shares of Kirloskar Industries climbed over 3% on Wednesday, bucking the trend of declining profits, as investors focus on underlying revenues and the company’s diversified portfolio amid exceptional charges related to recent mergers.
Kirloskar Industries’ shares climbed as much as 3.02% on Wednesday even after the company reported a steep drop in June-quarter profit, signalling that investors looked past the headline weakness to the underlying revenue trend and the one-off charge that hit earnings.
The stock touched an intraday high of ₹3,870 before closing at ₹3,835 on the NSE. According to the company’s quarterly update, consolidated profit attributable to owners fell 69.3% from a year earlier to ₹33.7 crore, while revenue rose 4.3% to ₹1,779.15 crore. EBITDA, a measure of operating profit before interest, tax, depreciation and amortisation, slipped 1.7% to ₹214.8 crore and the margin narrowed to 12.08% from 12.82%.
The sharp profit decline was largely driven by an exceptional expense of ₹29.33 crore linked to stamp duty and related costs from the merger of ISMT with subsidiary Kirloskar Ferrous Industries. In the same quarter a year earlier, the company had booked an exceptional gain of ₹2.51 crore. Profit also fell 23.9% from the March quarter, when consolidated net profit was ₹43.10 crore, while revenue eased 2.6% from ₹1,827.41 crore.
Kirloskar Industries is primarily an investment and holding company for the wider Kirloskar Group, with wind energy operations and a real estate arm under Avante Spaces. Its FY26 annual report put the market value of its investment portfolio at about ₹6,944 crore, well above a book value of ₹888 crore. The biggest holding is a 45.93% stake in Kirloskar Ferrous Industries, valued at ₹2,642.32 crore against an original cost of ₹374.12 crore, while portfolio companies generated ₹67 crore in dividend income during FY26.
The latest numbers follow a mixed run for the group. Business Standard reported in May that Kirloskar Industries’ consolidated net profit rose 111.89% sequentially in the March quarter to ₹43.10 crore and that the board recommended a final dividend of ₹13 per equity share for FY25-26. Even so, year-on-year profit was lower, underlining how volatile quarterly results can be for a company whose earnings are influenced not just by operations but also by portfolio movements and exceptional items.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
